5 ways to negotiate a solid executive compensation package in a recession

In 2021, venture capital funding flowed freely into the tech world, bolstering big funding rounds and even bigger salaries at SaaS companies. 

But now it’s 2022, and that cash flow has slowed dramatically. Major layoffs have replaced funding announcements, and we’re staring down a possible recession. With outright cash and sky high salaries off the board, negotiating a strong compensation package can seem daunting.  READ MORE

DOJ’s Revised Corporate Criminal Enforcement Policies Encourage Voluntary Disclosure and Focus on Compensation

Given DOJ’s continued focus on individual accountability, the new policies will expand DOJ’s evaluation of a company’s compliance program to include corporate compensation systems and the incentives created. In particular, DOJ will assess whether a company uses metrics to reward compliance-promoting behavior as well as clawbacks to deter and punish individuals who engage in corporate misconduct, suggesting that clawbacks appropriately shift the financial burden of misconduct away from shareholders and toward the individuals responsible. DOJ’s Criminal Division has been directed to issue further guidance by the end of the year specifically on how prosecutors should reward companies that adopt compensation incentives and penalties that promote compliance. READ MORE

SEC Adopts Pay Versus Performance Compensation Disclosure Requirements

On August 25, 2022, the Securities and Exchange Commission (“SEC”) adopted rules that amend Item 402 of Regulation S-K to require reporting companies to disclose information detailing the relationship between a company’s financial performance and executive compensation that was “actually paid” by the company over a five-year period (the relationship is referred to herein as “Pay Versus Performance”). The Pay Versus Performance rules were originally proposed in 2015 to implement the pay versus performance requirement in the Dodd-Frank Act and the SEC reopened the comment period for the proposed rules in 2022. The final rules will be effective for proxy statements filed in 2023 for calendar year-end companies. READ MORE

New Jersey Supreme Court Clarifies Independent Contractor Classification

The New Jersey Supreme Court’s recent decision in East Bay Drywall, LLC v. Department of Labor and Workforce Development, Docket No. A-7-21 (August 2, 2022), provides guidance as to the perils that may arise when businesses misclassify workers as independent contractors rather than employees. Under the state’s Unemployment Compensation Law (UCL), the “ABC Test” is used to determine whether certain workers are properly classified as employees or independent contractors. See N.J.S.A. 43:21-19(i)(6)(A)-(C). The court’s new decision is significant because it held that a contractors’ establishment of a separate corporate structure through which to render services may not suffice to establish independent contractor status under the ABC Test. READ MORE

New executive compensation disclosure requirement for the 2023 proxy season

The SEC has adopted final rules requiring that proxy statement disclosures reflect the relationship between the payment of executive compensation and a reporting company’s financial performance. The new disclosure applies to all SEC reporting companies, except foreign private issuers, registered investment companies and emerging growth companies, and will be required for fiscal years ending on or after December 16, 2022. Scaled disclosure requirements apply to smaller reporting companies. READ MORE

OFCCP Updates Guidance on Privilege Considerations for Compensation Analyses

On August 18, 2022, the US Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) made two significant announcements affecting federal contractors. First, the agency issued Directive 2022-01: Advancing Pay Equity Through Compensation Analysis, which replaces its original directive from March 2022 to clarify guidance regarding contractors’ compliance with compensation analysis obligations. READ MORE

Legal Complaint Around Student Athlete Compensation Takes ‘Aggressive’ Next Step

A new government entity is entering the growing movement to have athletes deemed as employees.

The U.S. Equal Employment Opportunity Commission (EEOC) could soon begin what one legal expert describes as an “aggressive investigation” into whether unpaid college athletes are being discriminated against because they are not fairly compensated. The EEOC was recently referred to an employment and civil rights complaint filed by the National College Players Association (NCPA) to the Department of Education in March. READ MORE

Amazon raises pay and enhances benefits for delivery drivers

Amazon is boosting pay and expanding benefits for the e-commerce giant's delivery drivers.

The company said Tuesday it will offer wage increases for drivers employed by its so-called delivery service partners (DSP), who ferry packages in the company's vans. U.S.-based DSP drivers also will be eligible to participate in a 401(k) plan, with Amazon pledging to chip in $60 million in the first year to help business owners match employee contributions.  READ MORE

SEC Adopts Pay Versus Performance Disclosure Requirements

The Securities and Exchange Commission (SEC) recently adopted new pay versus performance disclosure requirements, which will require companies to disclose information reflecting the relationship between executive compensation actually paid by a company and the company’s financial performance. The new rules will require companies to provide a table and clear descriptions disclosing specified executive compensation and financial performance measures for their five most recently completed fiscal years, among other items. READ MORE