New York State Passes Bill Requiring Compensation Ranges in Job Postings

On June 1, 2022, the New York State Legislature passed Senate Bill S9427A, which would amend the New York Labor Law (NYLL) by requiring that employers disclose compensation ranges in job, promotion, and transfer advertisements. This bill comes on the heels of New York City’s recent enactment of a similar law. While New York City’s salary disclosure law is set to take effect on November 1, 2022, the statewide law would go into effect 270 days after being signed into law. Eyes are now on Governor Kathy Hochul as we await her action on the bill. READ MORE

SEC Reopens Clawback Comment Period…Again

On June 8, 2022, the US Securities and Exchange Commission (“SEC”) issued a release (“New Reopening Release“), reopening the comment period on the clawback listing standard rules that it proposed in 2015 (“2015 Proposal“). At the same time, the SEC made available a memorandum prepared by the staff of the SEC’s Division of Economic and Risk Analysis (“Staff Memorandum“) that discusses the increase in voluntary adoption of compensation recovery policies by issuers and provides estimates of the number of additional restatements that would trigger a compensation recovery analysis if the rules were extended to include all required restatements made to correct an error in previously issued financial statements, including “little r” restatements. The Staff Memorandum also addresses some potential costs and benefits of the proposed rules. The SEC reopened the comment period to allow interested persons to consider and comment on the analyses and data set forth in the Staff Memorandum. READ MORE

Can salary transparency laws fix the pay gap?

Question: Are you for or against pay or salary transparency laws or anti-secrecy laws?

On the one hand, companies that offer salary transparency might attract more potential candidates. If people know the salary range for a position and still apply, they’re less likely to bail during the interviewing process. And it could close the pay gap between genders and races. READ MORE

Pay gaps between CEOs and employees have widened

The pay gap between CEOs and their workers grew wider last year among companies paying the lowest wages.

The average gap between CEO and median worker pay jumped to 670 to 1, up from 604 to 1 in 2020, according to a new report by the Institute for Policy Studies (IPS), a progressive think tank based in Washington D.C. The report looked at the 300 publicly-held U.S. corporations that had the lowest median wages in 2020. Among the 300 companies, 49 had ratios of CEO-to-worker pay above 1,000 to 1. READ MORE

Executive Stock Options and Systemic Risk

Banks’ role in financial intermediation and the provision of other specialized financial services not only places them at the center of many important global financial markets, but also ties their health to that of other financial institutions, industrial firms, and consumers. The vast reach of banks’ activities was made apparent during the financial crisis of 2007-2009, which also highlighted the acute need for a better understanding of whether, how, and the extent to which banks contribute to systemic risk in the economy (i.e., the risk that many financial institutions fail together). Prior research into the sources of systemic risk largely focuses on the outcomes of banks’ risky activities (e.g., the composition of banks’ financing or the correlation of banks’ asset returns). However, these and other risky activities are ultimately the result of bank managers’ decisions which, we argue, are shaped by their contractual incentives. Following this intuition, we study whether and how bank executives’ compensation contracts lead to the systemic risk of their institutions. READ MORE

Executive Recruiters Enjoying Best Run in Over 20 Years

Performance-related pay is helping drive total compensation upwards in the executive search industry, according to an early preview of Tempting Talent’s USA Executive Search & Recruitment Compensation Report for 2022. That and a growing degree of collaboration with executive search firms in the Silicon Valley venture capital community and across private equity are contributing to an optimistic outlook for the industry, despite an ongoing pandemic, inflation, fear of a recession, and the reverberations of Russia’s attack on Ukraine, among other challenges. READ MORE

Is it Groundhog Day? SEC reopens comment period for clawback proposal

Yesterday, the SEC announced that it is reopening the comment period for its 2015 proposal for listing standards for recovery of erroneously awarded compensation. Wait—didn’t they just do that? Yes, in October 2021. (See this PubCo post.) But no, that’s not Sonny and Cher on the radio. The SEC has decided to reopen the comment period AGAIN to allow further public comment in light of a new, just released DERA staff memorandum containing “additional analysis and data on compensation recovery policies and accounting restatements.” The new comment period will be open until 30 days after publication of the reopening notice in the Federal Register. READ MORE

Wages are rising at their fastest pace in decades. Here's how that stacks up with inflation

The white-hot labor market has driven up wages faster than at any time since the mid-1980s, as employers struggle to attract -- and retain -- workers.

But Americans aren't rolling in dough. Inflation has also surged, with the Consumer Price Index rising by 8.3% in the 12 months ending in April. This means the cost of essentials is eating away at workers' fatter paychecks. READ MORE