Elon Musk Inspires Boom-or-Bust Compensation Packages for CEOs

If Elon Musk can do it , I can too. Right?

That's apparently the newest mantra of corporate CEOs hoping to get their boards of directors and shareholders to approve a potentially enormous payday. What I'm talking about is companies modeling compensation packages after Tesla 's (NASDAQ: TSLA) performance award package for Elon Musk that may pay him $78 billion over the next 10 years . Now, Axon Enterprise 's (NASDAQ: AAXN) CEO, Rick Smith, is following with his own massive performance package that may misalign his interests and those of long-term shareholders.  READ MORE

Sanders targets CEO compensation

Sen. Bernie Sanders (I-VT) on Wednesday asked Pentagon Comptroller David Norquist during a Senate Budget Committee hearing to provide him with a report detailing how the Defense Department can effectively negotiate CEO salaries of defense contractors. 

Norquist said he was unaware of anything the Defense Department could do to impact the compensation of CEOs at private companies, but said U.S. taxpayers “should be paying for the service that we receive.” READ MORE

Employers Should Review Compensation Systems

If your company has not reviewed its compensation systems to ensure pay equity for female employees, now is the time to do so. In the fall of 2017, the Equal Employment Opportunity Commission (EEOC) released its 2018-2021 Strategic Plan announcing pay equity would be one of its six major priorities. Since then, four high-profile settlements have demonstrated the EEOC will be vigorously enforcing the Equal Pay Act and Title VII to ensure wage equality.  READ MORE

Annual Total Compensation under the Pay Ratio Disclosure Rule

Although adopted back in 2015, the SEC’s pay ratio disclosure rule has been receiving a lot of attention lately, as companies grapple with it for the first time during the 2018 proxy season. The rule was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act and generally requires a public company to disclose in its proxy statement the pay ratio between its chief executive officer and its median employee for the most recently completed fiscal year. In particular, the rule requires disclosure of each of the following items: READ MORE

Should Compensation Be Tailor-Made?

In today’s business reality, an organization’s biggest investment is its human capital. In fact, employees are the key to any successful company. Unfortunately, the insurance industry faces an increasingly challenging war for talent. From a mass exodus of tenured, skilled professionals to a shallow talent pool, the recruiting climate within insurance is heating up. READ MORE

Employees Afraid to Make Mistakes Exercising Equity Compensation

Employees who receive equity compensation from their employer like the perk a lot, but when it comes to exercising options or selling shares, they tend to freeze, fearing that they will make costly mistakes. That's according to a recent survey by Charles Schwab of employees that participate in an equity compensation plan, and it underscores the hand-holding help that advisors can provide.  READ MORE

 

Many Employers Plan to Use Tax Breaks on Compensation, Benefits

Following the passage of the Tax Cuts and Jobs Act, Aon conducted a survey of 504 mid-sized to large employers to find out how they plan to use the additional capital, as well as a survey of 2,079 employees to learn how they would like to see that money allocated.

The employer survey showed that 29% of employers plan to use the funds for employee compensation and benefits. Another 26% plan to spend the money on capital structure, 24% on infrastructure and 23% as a direct return to shareholders. READ MORE

Why employers should revisit their executive compensation strategies

Roughly four in 10 companies are planning or considering changes to their executive pay programs, or have already taken action, according to a recent study by Willis Towers Watson.

While 59% of surveyed employers say they do not plan to make any changes to their executive compensation strategies, experts say they may seek to revisit their pay metrics later in the year once they set their 2018 fiscal goals. READ MORE

Tax Cuts and Jobs Act – New Compensation Tax for Non-Profit Organizations on Excess Compensation and Excess Parachute Payments

The Tax Cuts and Jobs Act passed late last year and became effective as of January 1, 2018.  The Act includes a new provision that subjects certain “excess compensation” paid by exempt organizations (organizations exempt from income tax under section 501(a) of the Internal Revenue Code (the Code)) to the corporate income tax. READ MORE