Pandemic Hits US Bosses' Pay, But Impact Varies

Pay growth for top executives at some of the largest US firms slowed last year as the pandemic hit, and bonus payments fell, a survey showed, shedding light on how this population cohort of affluent individuals has fared. 

Willis Towers Watson’s Global Executive Compensation Analysis Team crunched the pay numbers on executives in S&P 1500 companies. There were smaller increases in both target and earned total CEO pay in 2020, increasing at the median by 4.7 per cent and 3.9 per cent, respectively. That is slower than the 6 per cent in target pay and 5.5 per cent increase in earned pay observed in the previous year and the lowest results since the 2015 to 2016 cycle. READ MORE

Pay streaming is about to upend salaries as we know them

Tied to the antiquated 2-4 week pay cycle, millions of Americans live paycheck to paycheck. Nearly half (42%) of U.S. full-time workers find it hard to meet household expenses on time each month, a recent survey showed. That means if an unexpected expense occurs, like a car repair, many people are forced to carry high-interest credit card debt or succumb to payday loans, which carry upwards of 300% interest. Alarmingly, there are now more payday loan storefronts in the U.S. than McDonald’s franchises. READ MORE

$21 is the new $15 in minimum wages at more companies

USAA is increasing wages by a little over 30% for its lowest-paid employees, as the nation's 29th-biggest bank joins Bank of America — the second-largest — in paying an hourly rate of at least $21.

The wage hike took effect on Sunday and translates into an annual salary of $43,680, in addition to retirement and other benefits, the San Antonio, Texas-based employer of 36,000 announced on Monday. Prior to this week, USAA had been paying an hourly minimum of $16, a buck more than the $15 minimum being called for in proposals to increase the federal minimum wage of $7.25.  READ MORE

Why your CFO's compensation declined compared to the CEO's

Businesses were less likely to increase CFO pay in fiscal 2020, in part because of the economic fallout from the pandemic.

Financial performance in 2020 fell compared to previous years. Median revenue declined 1 percent, and operating income increased 1 percent — below 2019 increases of 3 percent and 5 percent, respectively. In a typical year, performance at these levels likely would have resulted in more meaningful compensation decreases. READ MORE

Focus on S corps and shareholder compensation

The Treasury Inspector General for Tax Administration (TIGTA) recently summarized its findings concerning efforts by the IRS to identify S corporation reasonable compensation issues. The report concludes that the IRS is likely failing to adequately identify S corporations that are underreporting their shareholders’ compensation in an effort to avoid employment taxes. Interestingly, in its response, the IRS largely disagreed with the inspector general’s conclusions and its related recommendations. READ MORE

Millions of people earning higher minimum wages can probably thank new Nobel Prize winner

If your state recently raised its minimum wage, there’s a good chance new Nobel Prize winner David Card helped make it happen.

Card co-pioneered research in the early 1990s that showed raising the minimum wage didn’t necessarily cause businesses to lay off workers and hurt employment. Before his famous study, economists almost universally believed increasing the minimum wage cost jobs. READ MORE

What a $100K Salary Looks Like After Taxes in Your State

America is still in the midst of a health crisis triggered by the global coronavirus pandemic. Unfortunately, this has brought financial hardship to many Americans -- especially because most have insufficient emergency funds. In a recent GOBankingRates survey, nearly half of those polled claimed to have less than one month of emergency savings tucked away, and fewer than 19% have more than six months of savings. At times like these, it’s more important than ever to focus on just how much income you take home from your paycheck so you can budget appropriately going forward. READ MORE

Setting Pay and Policy for Remote Workers

While there were many topics that piqued the interest of attendees at WorldatWork’s “2021 Total Rewards Conference and Exhibition,” a session focused on how to compensate remote workers was among the most captivating.

The COVID-19 pandemic forced most businesses into some form of remote work beginning in  March 2020. And that model, which proved to be viable, has led many organizations to opt for remaining either fully remote or in a hybrid model going forward. With that, however, has come a host of complicated questions and decisions for organizations on how to go about compensating these remote workers. READ MORE

US wages are going up, and those who don’t adapt to the new reality will fail

There is a significant shortage of labor across the United States. Yes, federal unemployment Covid payments ran out after Labor Day. But still, many workers are reluctant to return to work, wary of their health and safety as the Delta variant continues to rage. Many are looking to switch jobs amid reports of the “great resignation” and employers are desperate to do whatever they can to retain workers as demand continues to remain strong. READ MORE

U.S. Tech Salaries Grow, But Not For Everyone

The median income for tech professionals hit US $154,443 in 2020, up from $148,500 in 2019. Adjusted to constant 2020 dollars, that's about a 2.8 percent increase. These numbers exclude overtime, profit sharing, and side hustles. That's particularly good news for engineers this year, considering that inflation-adjusted salaries were basically flat in 2019 compared with 2018. READ MORE

Stock Options & RSUs From Startup To IPO Or Acquisition

Fast-growing private companies rely heavily on equity compensation to recruit, motivate, and retain the best employees. Grants are typically stock options, restricted stock, or restricted stock units (RSUs). However, stock comp in private companies is surprisingly more complex and varied than what’s commonly used in mature public companies. The many challenges range from the inability to sell stock at exercise to fund the exercise costs to lockup restrictions on shares after the IPO. READ MORE

Don’t Let Stock Options Keep You From Leaving a Job

As millions of Americans change jobs, some in the finance and tech sectors may be sitting tight, feeling locked in by equity-based awards. Those industries often pay a hefty portion of compensation in stock options, where employees can buy company stock at a set price, or restricted stock units, where workers are awarded shares outright. To reap the benefits of either, you typically have to wait a set period of time. READ MORE

The myths of ‘income inequality’

It is an article of faith among progressives that income inequality is getting worse in California. In fact, claims of a widening gap between rich and poor are used nationally to justify raising taxes and accelerate the redistribution of wealth.

But like other urban myths, such as how Prop. 13 supposedly starved local governments, it is easily debunked by critical analysis of the data. As it turns out, while the rich are in fact getting richer, so are the poor. READ MORE

SEC Proposes to Amend Form N-PX

The SEC also proposed a new rule (Rule 14Ad-1) and form amendments under the Securities Exchange Act of 1934 (Exchange Act) that would require an institutional investment manager subject to Section 13(f) of the Exchange Act to report annually on Form N-PX how it voted proxies relating to executive compensation matters (i.e., “say-on-pay”), as required by Section 14A of the Exchange Act. READ MORE