Should You Accept Equity as Compensation?

Startups often lure in star employees with the promise of equity. Why? A lot of startups are short on cash but can issue shares at will and have equity to hand out.

I recently helped a client negotiate his full-time employment agreement with a newly funded startup doing exactly that: providing equity in lieu of higher compensation. We normally deal in freelancers, but we are increasingly being asked to lend our negotiating skills for full-time employment contracts. READ MORE

Who Gets What Slice Of The Pie

Startup equity is one of those things that it’s fair to say every startup founder without an MBA struggles with. Most people don’t have to think about this stuff until it’s really important. But if you’re starting to freak out about who gets what slice of your startup pie, take a deep breath, calm down, and get ready for Startup Equity 101. READ MORE

Director Equity Award Limit In LTIPs: How Companies Are Addressing It This Proxy Season

This proxy season has revealed an intensifying trend to address limitations on grants to non-employee directors in many long-term incentive plans ("LTIPs"). Based on a review of approximately 50 LTIPs submitted for approval this proxy season thus far by Delaware companies, a majority of such LTIPs now include a director-specific limit on the size of annual non-employee director grants and a handful generally permit grants only in pre-determined amounts as set forth in the LTIPs.   READ MORE

CEO Pay Rewards What Was Going to Happen Anyway

Compensation in all its excesses for top corporate executives is a hardy perennial for astonishment, outrage and fruitless demands for reform. I have said more than once that many, indeed, most, chief executive officers at publicly traded U.S. companies are wildly overpaid. But some recent research adds some nuance that deserves a closer look.

First, a quick reminder: For more than four decades U.S. executives have received much bigger pay increases than their brethren in Europe and Japan. Today, top German executives make about half of what their U.S. counterparts are paid; Japanese CEOs get paid about 10 percent of comparable American CEOs. READ MORE

NY Fed's Dudley says regulators should increase focus on bank executives

Banks should adopt compensation plans that discourage excessive risk-taking and place greater onus on senior managers for wrongdoing, the outgoing head of the New York Federal Reserve said on Monday. William Dudley, who plans to step down later this year, said regulators should encourage banks to overhaul their corporate cultures to reduce risk and bad behavior, even as regulators move to relax other rules introduced following the 2007-2009 financial crisis. READ MORE

You’ve Got Lots of Company Stock. Now What?

It’s a decidedly first-class problem: what to do when you receive most, or even substantially all of your compensation in stock?

As the concept of “pay for performance” has taken root in corporate America, more C-suite executives are gaining firsthand experience with the major upsides — and occasional pitfalls — that can accompany generous equity compensation plans. READ MORE

On exec compensation, Sen. Sanders is comparing apples and oranges

The U.S. secretary of defense makes roughly $200,000 a year, while the CEOs of Lockheed Martin and Raytheon make more than $20 million. There is an element of absurdity to that.

And then you consider that Lockheed’s Marillyn Hewson and Raytheon’s Tom Kennedy are not an anomaly. Their counterparts at General Dynamics, Northrop Grumman, Boeing — all top-tier defense companies — pay their CEOs total compensation that falls in that ballpark, albeit a bit less. READ MORE

Elon Musk's New Compensation Plan Is Absolutely Insane

If you are a Tesla (NASDAQ:TSLA) shareholder or you follow the news about the company, you've almost certainly read headlines over the last couple of days about Elon Musk's new potential $55 billion salary package, consisting of stock and awards. This salary package was voted on and confirmed by shareholders on Wednesday of this week, with a reported 73% of shareholders voting in favor of granting this package. READ MORE

How New Tax Laws Could Affect Your Bonus

High-level employees in the U.S. accustomed to receiving bonuses should expect some changes in their compensation packages under the new tax law, either in how they’re paid or how they’re taxed—or both.

This isn’t necessarily bad news—executive pay is likely to continue to rise as it has for decades—but it may require extra planning to ensure compensation is maximized and tax surprises are limited. READ MORE

Director Equity Award Limit in LTIPs: How Companies are Addressing it this Proxy Season

This proxy season has revealed an intensifying trend to address limitations on grants to non-employee directors in many long-term incentive plans (“LTIPs”). Based on a review of approximately 50 LTIPs submitted for approval this proxy season thus far by Delaware companies, a majority of such LTIPs now include a director-specific limit on the size of annual non-employee director grants and a handful generally permit grants only in pre-determined amounts as set forth in the LTIPs.  READ MORE

Trump Administration Targets Federal Compensation

The Trump administration’s new management agenda, released earlier this week, has significant implications for federal pay and benefits.

The agenda frames the issue by noting that “it is important to appropriately compensate personnel based on mission needs and labor market dynamics,” something the existing compensation system fails to do. The document then repeats the fiscal 2019 budget proposal to forgo an across-the-board pay increase while realigning “incentives by enhancing performance-based pay and slowing the frequency of tenure-based step increases.” READ MORE

New wage-gap data increases pressure on banks to justify CEO pay

It’s no secret that bank CEOs are paid handsomely. But how their compensation stacks up against workers further down the corporate ladder has been a mystery for years.

Companies have begun pulling back the curtain over the past few weeks, disclosing ratios that compare pay packages for CEOs with average workers’ salaries. The disclosures are required this year for all publicly traded companies, under a provision in the Dodd-Frank Act. READ MORE

Verizon’s retiree shareholders seek to block above-market executive pay

Verizon’s activist retirees have launched two proxy proposals on this year’s ballot for the annual shareholders' meeting in an effort to keep the telco’s executive management team more accountable.

One of the proposals calls to claw back earnings from executives whose conduct harms shareholders, while another prohibits above-market earnings for senior executives on certain retirement and deferred income accounts.  READ MORE