Reducing Salaries of Exempt Employees under the FLSA

As daily headlines have shown, the economic fallout from the COVID-19 pandemic has led businesses of all types to announce dramatic changes in workforce levels and employee pay. Many of these companies have made the decision to reduce the salaries they pay to their exempt employees. These reductions, which often range from 10 percent to 30 percent, have affected executives, managers, and professionals. On the positive side, salary reductions give employers an option for reducing labor costs that preserves more jobs and mitigates the loss of skilled employees. READ MORE

Companies Are Quietly Pulling the Plug on “Hero Pay” for Essential Workers

The coronavirus pandemic has highlighted a major modern contradiction—many "essential" workers, the ones whose jobs are too important to shut down, are the ones making the least money. Meat processing, for example, is a job that pays poorly and is riddled with danger. And yet it's been deemed so important that Donald Trump used the Defense Production Act to order that plants stay open. READ MORE

The Pandemic's Impact on Compensation and Benefits

Disruption in business operations by the pandemic has increased the need for employers to focus on compensation and employee benefits. Developing a comprehensive business response will involve benefits plans and more broadly the compensation philosophy employers will adopt. The CARES Act provided some additional flexibility, but this entire area is otherwise heavily regulated, and any contemplated change should be approached with caution. READ MORE

Employee Stock Compensation Plans and Market Downturns

There’s a lot of talk going around about a nasty stock market drop and coming recession. Even though the market seems to be less volatile at this point, many market watchers warn there could be a reckoning, especially if we see another wave of COVID-19 infections. The economic implications of even our relatively brief shutdown are also likely to have an impact for at least the next few earnings cycles. READ MORE

Does It Make Sense to Consider a Secular Trust for Deferred Compensation

The purpose of this Post is to highlight the question of whether, in today’s economic environment, deferred compensation monies should be secured with a secular trust.  This Post is Part 7 of a 7-Part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today’s economy. READ MORE

Key executive compensation issues to consider during an economic downturn

In response to the current health and financial crisis caused by COVID-19, many US-based employers are assessing measures such as employee furloughs, layoffs, and adjusted executive compensation arrangements. In this article, we highlight some of the key risks and issues employers are encouraged to consider as they engage in executive compensation planning strategies, from the impact of furloughs on equity award vesting to changes to compensation and severance policies. READ MORE

Coronavirus (COVID-19) And Stock Repurchase Programs

As the coronavirus (COVID-19) pandemic continues to rapidly unfold and create volatility in the market, companies are considering whether to opportunistically buy back their stock pursuant to existing or newly established share repurchase programs. When considering share repurchase programs, companies should consider sharp criticism of stock repurchase programs, which has become more heightened in light of the adverse economic impacts of COVID-19 and the federal government’s response to the crisis. READ MORE