The Idea That Raising Wages Destroys Value Is A Fallacy

Its predictability doesn’t make it any less perplexing. Time and again Wall Street analysts will criticize a company for raising wages at the alleged expense of shareholders, and the stock will take a hit. Shortly thereafter, as the benefits of the wage increase begin to pay off – in the form of more engaged and productive employees, happier customers, better retention, etc. – the stock recovers and goes on a tear. Fears of margin compression subside. The returns on that investment in human capital become clear. Shareholders are satisfied. READ MORE

Executive Compensation Voting During the Pandemic

Executive compensation is a perennial engagement topic for the State Street Global Advisors Asset Stewardship team. We believe that executive compensation presents risks, such as creating perverse incentives, as well as opportunities, such as demonstrating a commitment to environmental, social and governance (ESG) priorities. When structured appropriately, executive compensation can be well aligned with operational goals and shareholder results. However, this topic is receiving elevated attention because the COVID-19 pandemic has rendered many compensation-linked performance targets unattainable. READ MORE

Changes to Section 162(m) Affecting Deferred Compensation Arrangements

Public companies maintaining deferred compensation arrangements for their executive officers should consider how recent changes to the regulations under Section 162(m) of the Internal Revenue Code (the Code) may impact the timing of payments to be made to participants and their beneficiaries under such plans – if action is required, the affected plans must be amended before December 31, 2020 to avoid complications or penalties. READ MORE

Top 10 Questions To Ask About Your Restricted Stock Or RSU Grant

At a public company, you are now much more likely to get a grant of restricted stock or restricted stock units (RSUs) than stock options. That’s true all the way from Apple, Amazon, Microsoft, or Tesla to new IPO companies. Whether you consult a financial advisor or do your own tax and financial planning, you need to understand some core issues with these grants to build wealth and prevent costly mistakes. READ MORE

Thoughts When Linking Public Company Executive Pay to D&I Initiatives

This Post will begin a series of blog entries focused on the topic of linking executive pay to a publicly-traded issuer’s diversity and inclusion (“D&I“) initiatives.  As background, there has been a recent push to hold executives accountable for the effectiveness of an issuer’s D&I initiatives by linking their executive pay to the success of such initiatives.  Pretty straight forward (i.e., the success of the D&I initiative becomes one of the metrics in the issuer’s performance-based compensation strategy). READ MORE

Equity Compensation Complicates Planning During Pandemic

The pandemic has pushed employees who receive company stock options to look for help from advisors, Schwab Stock Plan Services reported Tuesday.

Two-thirds of employees who have recently sold stock options did so because of the pandemic, according to a Schwab survey, which was based on 1,000 individuals receiving stock options. Thirty-nine percent of those surveyed said they were more likely to need financial advice due to the pandemic. READ MORE