Unicorn lobby pushes back on stock-option move in Republican tax bill

Lobbyists for so-called unicorns have persuaded Republicans in the House to allow private company employees to wait up to five years before owing taxes on stock option gains — but the Senate plan forces everyone to pay as soon as share grants vest.

The 400-plus-page House draft bill released November 2 by the House included a provision, 409B, that triggered taxation whenever any payment or award became vested for all companies, public and private. READ MORE

A Tax Tweak for Silicon Valley Workers Awaiting IPOs

The Senate's tax proposal would disrupt the disrupters: By taxing stock options at the time of vesting, rather than when they're exercised, the change would push startups toward cash compensation. Venture capitalists say that would be expensive and harmful to innovation. But the reality is that changes in Silicon Valley financing culture over the last decade have made equity compensation a bad deal for startup employees, as I can personally attest, so this policy change would probably be good for workers.  READ MORE

Why Washington’s tax plans for executive compensation are misguided

Tucked into the mammoth tax bills Congress is debating are two provisions that will increase the taxation of executive compensation and undermine related governance practices. Corporate directors and senior managers, take note.

For starters, the Senate bill would virtually eliminate the ability of a company’s employees to defer the taxation of their compensation. Both the House and the Senate bills would severely limit the ability of corporations to deduct awards of performance-based compensation to their top five officers. READ MORE

The Impact of the Tax Cuts and Jobs Act on Executive Compensation

On November 9, 2017, the House Ways and Means Committee approved the House’s version of the tax reform bill (the “House Bill”) and voted to report it to the House floor for a full House vote. On the same day, the Senate Finance Committee released the Description of the Chairman’s Mark of the “Tax Cuts and Jobs Act” (the “Senate Finance Committee Mark”), which sets forth a summary of the Senate’s proposed tax reform legislation. The Senate Finance Committee Mark will be marked up by the Senate Finance Committee beginning Monday, November 13, 2017.  READ MORE

How Companies Can Rethink Their Compensation Strategy With the Help of Behavioral Science

You value your team. That’s why you put together a compensation package that includes a competitive salary, generous benefits and even the occasional rooftop happy hour. But, if you add in a few more key elements, you’ll create a compensation strategy that helps you connect emotionally with your employees, keep your existing team motivated and attract the right candidates when it’s time to grow. READ MORE

Equity Plan Share Reserves: How to Increase Its Life Expectancy: Executive Compensation Practical Pointers

Efforts to conserve an equity plan’s share reserve should begin the day the issuer’s stockholders approve the plan (or share increase), and should continue going forward. Issuers that do not make such efforts tend to face problems relating to dwindling share reserves, including moving to cash-based programs, hiring proxy solicitation firms to garner stockholder support for share increases, and overcoming possible negative reactions from ISS. READ MORE

On executive pay, incentives have limits

What can a person do that is worth a third of a billion dollars? A retirement announcement from Kenneth Chenault, chief executive of American Express, prompts the question. This month he said he would leave the company next year, after 17 years as chief. His compensation as CEO to date runs to $370m in shares and cash, an average of $22m a year.  READ MORE