What Happens to Deferred Compensation If I Quit My Job?

A deferred compensation plan is a plan in which employees defer part of their compensation until a later date. Usually, the date when the additional funds are disbursed to the employee is the date of retirement, although some plans enable flexibility for major expenses like children's college or buying a house.

In many circumstances, deferred compensation plans offer certain tax benefits. Here’s what happens to your deferred compensation if you quit your job before your expected retirement date. READ MORE

McDonald’s owners offer tuition, child care to lure burger flippers

McDonald’s Corp. owners are adding emergency child care and other benefits, as many U.S. restaurants are struggling to hire enough workers to run their businesses.

U.S. franchisees of the burger giant aim to boost hourly pay, give workers paid time off and help cover tuition costs to draw enough workers and improve the Golden Arches’ image as an employer. McDonald’s corporate parent said it is making a multimillion-dollar investment to back the franchisee efforts. Franchisees own 95% of the chain’s roughly 13,450 U.S. stores. READ MORE

Business Strategy and Compensation Alignment with a Post-COVID Lens

COVID-19 and the ensuing pandemic produced the largest global economic shock and business transformation period of our lifetimes. And while there were some companies that benefited from the situation, for many others the virus painfully exposed material weaknesses in their business.

We’ve experienced wholesale changes in how work gets done. For workers who could work remotely, there was a pivot to working from home. In fact, Pearl Meyer’s On Point Survey "Work From Home Policies and Practices" found that the work-from-home model may become permanent for many companies. Respondents indicated they expect a third of their total United States-based workforces will continue to work remotely. An interesting lesson here is just how quickly — and seamlessly, for many — this pivot was executed; it happened in a fraction of the time most of us would have thought possible. READ MORE

More Companies Use DE&I as Executive Compensation Metric

Diversity, equity and inclusion (DE&I) figures into an increasing number of executive pay programs. But these programs typically are annual bonuses rather than long-term incentives, which lessens their impact.

"In the 12-month period to Sept. 30, 2018, 51 companies in the S&P 500 included a diversity metric in their compensation program. In the 12-month period to Feb. 1, 2021, that number had nearly doubled to 99 companies," according to Glass Lewis, a governance solutions firm, in its report, Racial & Ethnic Diversity in the Boardroom. READ MORE

How some companies play ‘fast and loose’ with executive benefits

The Trump Organization and its chief financial officer, Allen Weisselberg, pleaded not guilty to tax crimes on Thursday. Experts say the illegal practices the government alleges occurred may be more common among certain types of companies.

The indictment says the Trump Organization and Weisselberg skirted IRS rules by failing to report so-called “fringe benefits,” a form of employee compensation. READ MORE

What Does Supreme Court Ruling Mean for College Athlete Compensation?

On June 21, the Supreme Court ruled against the National Collegiate Athletic Association (NCAA) by declaring the organization is violating antitrust laws, a move that will heavily influence college sports for years to come. 

In The National College Athletic Association vs. Alston, the justices voted 9-0 to uphold the lower courts’ ruling that the NCAA can no longer dictate limits on education-related compensation.  READ MORE

How to Integrate ESG into Compensation Programs

On June 16, 2021, the U.S. House of Representatives passed H.R. 1187 (the “Corporate Governance Improvement and Investor Protection Act”), which would require the Securities and Exchange Commission (“SEC”) to establish rules requiring public companies to disclose certain ESG metrics, including metrics related to climate, board diversity, and employee management and welfare practices. READ MORE

To cope with labor shortages, raise emotional compensation

The current labor shortage and employee retention struggles are concerning issues for organizations. Many leaders are scrambling to attract and retain the workers they need.

A combination of factors has resulted in an insufficient number of workers to meet available jobs: job quits hitting historic highs, declining immigration, and fewer individuals who are of working age (ages 16-64). This labor shortage started before the COVID-19 pandemic and is expected to persist for some time. READ MORE

Navigating Post-Pandemic Compensation Challenges

Beginning in March 2020 and stretching into 2021, employers made drastic changes to employee pay as business dried up and uncertainty reigned.

A survey of 2,800 senior managers at U.S. companies, conducted by staffing firm Robert Half during the second half of 2020, found that 57 percent of respondents had suspended salary increases as a result of the COVID-19 pandemic. As the situation settled and companies began to feel more confident about their prospects, they reconsidered: READ MORE

Crypto Compensation: Fad or Viable Payment Plan of the Future?

If you’ve paid much attention to financial markets or news in the past year, then you’re at least acutely aware of the cryptocurrency craze that’s taken place in the early stages of 2021.

Bitcoin, the original and most mainstream cryptocurrency, began 2020 at a value of $7,194.89 and surged at the tail end of the year and the first quarter of 2021, reaching a high-water mark of $64,863 in April. Likewise, ethereum, the second largest cryptocurrency, skyrocketed in value during this time frame, going from around $130 in value to begin 2020 to its current price of $2,119. While ethereum is still around its all-time high, bitcoin has since settled back to $33,475 as of July 1, but both coins’ extreme rise vaulted them into the mainstream conscience, which has since lent itself to many intriguing developments in the space. READ MORE

Biden's tax plan would cost richest Americans an extra $1.5M next year, analysis finds

The top sliver of U.S. households could see their tax bill climb substantially under the spending plan introduced earlier this year by President Biden.

That's according to a new analysis published by the Urban-Brookings Tax Policy Center, which found that the wealthiest 0.1% of Americans – who earn at least $3.6 million – would pay an additional $1.56 million in federal taxes each year if Congress approves Biden's sweeping tax and spending proposal. Their after-tax income would plunge by about 16.8%, the study said. READ MORE

Minimum wage continues to rise in states as federal action stalls

Minimum wage increases went into effect in several states on July 1 as states take it upon themselves to increase pay for low-wage workers to keep up with the growing cost of living.

The federal minimum wage sits at $7.25 an hour, a number that has been in place since 2009. (Democrats tried and failed to raise the federal minimum wage as part of stimulus negotiations earlier this year.) In a majority of states, the state minimum wage is now higher than the federal minimum. READ MORE

Same Job, But the Woman Makes $200,000 Less

In April, the sudden death of Lee Delaney, the CEO of BJ’s Warehouse Club, set into motion a chain of executive moves in which former Controller Laura Felice replaced CFO Bob Eddy, who took over as CEO. With all due respect to the difficulties and grief involved, I couldn’t help noticing the salaries being offered to the newly named executives. The new CEO received the same $1.2 million that Delaney had earned, but Felice’s salary was set at $600,000, nearly $200,000 less than what Eddy had been making. READ MORE

ESG and the Sustainable Economy - Diverse and Inclusive Businesses

While governance in the context of ESG considerations is generally focused on how a company is managed by its executives, directors, and management team, investors more focused on governance often look beyond the tone-setting thought leadership and dissect the internal system of practices, controls, and procedures companies adopt in order to govern themselves, make effective and conscious decisions, comply with the law, and meet the needs of internal and external stakeholders from the broader sustainable economy perspective. In essence, to excel in governance requires corporate behavior and leadership to master not only the letter of the law, but also the spirit of it. READ MORE

What is reasonable compensation for employees of an I.R.C. § 501(c)(3)?

One of the most important decisions a board determines is what constitutes reasonable compensation. The rules for this determination are robust and so are the taxes imposed for violations of the Internal Revenue Code and the corresponding Treasury Regulations. In this 2-Part series, we examine the taxes imposed for unreasonable compensation and explain the steps for determining reasonable compensation. In this Part 1, we introduce the persons potentially subject to the taxes and the taxes themselves. READ MORE

Supreme Court declines to hear case on remote workers and out-of-state income tax

The U.S. Supreme Court on Monday chose not to wade into the issue of one state taxing another state’s residents while they work from home.

New Hampshire wanted permission to sue Massachusetts for continuing to tax a number of New Hampshire residents who had been working in Massachusetts when the pandemic hit, but then switched to work at home back in New Hampshire. READ MORE