Linking specific components of executive compensation to environmental, social and governance (ESG) performance metrics is increasingly a way to both highlight a company’s commitment to its sustainability goals and to focus senior executives on their role and responsibility in delivering on these ambitions. READ MORE
New Disclosure Requirements for the 2023 Proxy Season
Looking ahead to the upcoming 2023 proxy season, the U.S. Securities and Exchange Commission (“SEC”) has adopted new compensation disclosure obligations that will require significant thought, preparation, and lead time. These obligations can be found in new Item 402(v) of Regulation S-K, which implements Section 14(i) of the Exchange Act. READ MORE
The Current Landscape in Executive Compensation as Reflected in the 2022 Proxy Season
Pay Governance LLC provides counsel and advice to the Board of Directors’ Compensation Committees of more than 400 prominent publicly-traded companies. We frequently are requested to attend meetings of the Compensation Committee to provide our insights and advice regarding trends and developments as well as to render technical advice and services in executive compensation. Our ongoing client work and internal research as well as the Compensation Committee meetings we have attended during the 2022 proxy season give us a comprehensive view of the prevailing issues for Compensation Committees and how these issues are shaping the design and implementation of viable and effective compensation strategies. READ MORE
Pay gap between male and female partners narrows to 34%; what is their average compensation?
The average male law firm partner earns 34% more than the average female partner, which is less of a differential than in prior years, according to a survey by recruiting firm Major, Lindsey & Africa in association with Law360. READ MORE
Supreme Court Considers Whether “Highly Compensated” Employees Paid on a “Day Rate” Basis Are Overtime-Exempt Under FLSA
On October 12, 2022, the Supreme Court held oral argument to address the decision of the U.S. Court of Appeals for the Fifth Circuit in Hewitt v. Helix Energy Sols. Group, Inc., 15 F.4th 289 (5th Cir. 2021), cert. granted, No. 21-984 (U.S. May 2, 2022), and a corresponding split among the circuit courts of appeal regarding the application of Fair Labor Standards Act (FLSA) regulations for the “highly compensated employee” (HCE) exemption from overtime. READ MORE
What Is A Compa Ratio & How Is It Used?
Are the salaries of your employees competitive? Are they paid fairly? The answer to these questions lies in compensation ratios, or compa-ratios. This metric evaluates the competitiveness of an employee’s compensation based on the midpoint of a predetermined salary range. In this article, we’ll discuss how compa-ratios can be used as a guide for your payroll and compensation decisions. READ MORE
IRS pushes 2023 FSA cap over $3K in ‘relatively large increase’
Employees may contribute up to $3,050 to flexible spending accounts in 2023, the IRS announced Tuesday.
The update represents a “relatively large increase” — a $200 jump — over this year’s $2,850, according to Lisa Myers, director of client services, benefits accounts, at advisory firm WTW. The shift is due to high inflation levels, Myers said in a statement provided to HR Dive; the previous adjustment increased the cap by $100. READ MORE
CFOs, Are You Prepared To Respond Effectively To Compensation Conversations?
It’s the season for annual planning and budgeting, and many chief financial officers (CFOs) are being urged to increase employee compensation in the year ahead for both new hires and existing staff. In many cases, CFOs have already been asked to bolster their companies’ salary budgets for the remainder of the year. A survey by The Conference Board found that U.S. employers have adjusted their total salary increase budgets for 2022 upward, from 3.6% to 4.1%. READ MORE
Long-awaited Pay v. Performance Rules Adopted
Recently, the U.S. Securities and Exchange Commission (the “Commission”) adopted long anticipated final rules requiring registrants to disclose information regarding the relationship between the actual compensation paid to their executives and the registrant’s financial performance (the “Pay v. Performance Rules”). The Commission believes that these disclosures will “allow investors to assess a registrant’s executive compensation actually paid relative to its financial performance more readily and at a lower cost than under the existing executive compensation disclosure regime.” READ MORE
CFO pay saw record 17% increase in 2021
Median CFO compensation — buoyed by strong company and stock performance — made the largest year over year gains in ten years, a Sept. 30 study by consultancy Compensation Advisory Partners (CAP) found. READ MORE
The executive-worker pay gap keeps getting bigger
Money might seem tight, but CEOs are doing just fine.
Top executives earned 399 times that of the typical worker in 2021, according to a new report from the Economic Policy Institute (EPI). The left-leaning think tank projected that CEO realized compensation at the top 350 companies in the U.S. increased by 11.1% to $27.8 million from 2020 to 2021. That includes vested stock awards and cashed in stock options—essentially, the actual worth of the stocks that (largely) account for a CEO’s pay. READ MORE
SEC Finalizes “Pay-Versus-Performance” Rules Under Dodd-Frank Act
On August 25, the Securities and Exchange Commission (“SEC”) adopted the final rules that require a public company to disclose the relationship between the compensation of its top executives and the company’s financial performance. 87 Fed. Reg. 55134 (Sept. 8, 2022). The “pay-versus-performance” rule is the most recent set of rules issued by the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), enacted in 2010. READ MORE
The 8 Biggest Considerations When Deciding Your Work-From-Home Compensation Strategy
Like many employers, you may have shifted to a remote work or hybrid model allowing employees to work from home full time or split their time between home and the office. But have you decided how you will pay remote workers, and have you communicated a consistent policy to your employees? While there is certainly no one-size-fits-all policy, there are eight key considerations your organization should keep in mind when going down this path to ensure you remain legally compliant and provide the best atmosphere for your operations to thrive. READ MORE
Americans face ‘most severe’ impact to wages in 25 years
A new report published by the Federal Reserve Bank of Dallas states that American workers' wage growth is lagging behind inflation at a rate causing problems unseen in a quarter-century. READ MORE
Salary History & Pay Transparency Laws by State and Locality
As pay equity gains traction nationwide, state and localities are enacting laws aimed at reducing the informational imbalances around pay that can ingrain existing pay disparities.
These laws, known as salary history and pay transparency laws, vary from state to state and locality to locality, creating a contradictory and rapidly changing landscape that you and other employers must try and navigate when recruiting and hiring. READ MORE
Final Two Dodd-Frank Provisions Could Hinder Boards’ Discretion
Over the past decade, the implementation of Dodd-Frank provisions such as say on pay, the advisor independence rules and CEO pay ratio disclosure has significantly influenced the evolution of executive compensation practices and disclosures as well as the role of the board. Now, the SEC has turned its attention to finalizing the open compensation-related Dodd-Frank provisions that remain: clawbacks and pay vs. performance disclosure. Both rules were proposed in 2015. READ MORE
Organizations Should Move Past Skirting Pay Transparency Legislation
Pay transparency is becoming increasingly important for today’s employees and job candidates. In fact, most (60%) employees say they’d switch jobs for more pay transparency. However, many employers are still hesitant about revealing information about their organization’s pay practices. READ MORE
Pay equity: Who should be in charge?
As organizations seek to rightsize their compensation packages, especially given the pressures of the so-called Great Resignation and trends like quiet quitting, the focus on pay equity is becoming ever sharper. While fair pay practices are increasingly viewed as a must for a strong recruitment and retention strategy, ideas about who should actually be setting those policies are less clear. READ MORE
Inflation, Great Resignation but no raises? Time to ‘leverage data’
More than one-third of employees report they haven’t received a pay increase in the past year, according to a survey of 1,000 employees by HR software firm BambooHR. The data also reveals some stark differences among genders. Fewer women (62%) are receiving raises than their male counterparts (66%), and those women who are getting salary increases are getting smaller raises than their male colleagues, 5.24% increases for women compared to 6.39% for men. READ MORE
US employer salary projection 2023 to lag inflation
The good news is that salaries in US companies are going up. The bad news is that despite the increase, 2023 compensation budgets and salary projects for US employers are unlikely to meet employee expectations amid rising high inflation. READ MORE