DOJ Announces Compensation Clawback Pilot Program, Changes to Corporate Compliance Program Evaluation Criteria

On March 2, Deputy Attorney General Lisa Monaco announced the launch of a significant pilot program on compensation incentives and clawbacks during a speech at the ABA White Collar Crime Conference in Miami. Under the “first-ever” three-year pilot program, companies will be able to reduce criminal fines by attempting in good faith to claw back compensation from individual wrongdoers—even if those efforts are unsuccessful—and the companies will be able to retain any recovered funds. READ MORE

American Workers’ Fortunes Have Taken a Remarkable Turn

Last month, Target announced that it would pay new employees as much as $24 an hour and extend health benefits to anyone working at least 25 hours a week. The company is hardly the only one coughing up cash to lure in new workers or retain those on staff. Starbucks recently set a national minimum wage of $15. McDonald’s, Dairy Queen, and Subway franchises have been offering signing incentives. Lowe’s is giving bonuses to hourly workers this month. READ MORE

New Supreme Court Ruling on Salary Basis for Exempt Executive Employees

The United States Supreme Court just issued a new ruling on the salary basis test for exempt executive employees.  Before we get to that, here is a quick background on the salary basis and executive employee tests, which are important to understand as we look at this new case.

The Fair Labor Standards Act provide an exception to the minimum wage and overtime requirements for “any employee employed in a bona fide executive, administrative, or professional capacity.”  READ MORE

Pay plan rejections hit record high

Shareholders are typically more likely to give compensation packages a thumbs down when pay plans include significant year-over-year increases in the 20%-50% range as well as when a company’s performance wanes, Newbury said. 

More compensation information is on its way for investors to pore over. For the first time this year, large public companies will be required to disclose additional information about executive compensation under the long-delayed pay-versus-performance rules that were adopted last year by the SEC. READ MORE

DOJ Announces Significant Guidance on Compliance, Compensation, Communications and Cooperation

On March 3, 2023, as part of the rollout of several updates to its guidance on corporate compliance programs, the Department of Justice (DOJ) released a new policy aimed at incentivizing compliance-driven compensation and bonus plans as part of its enduring priority of combating corporate crime. The DOJ described the policy as part of its continued efforts to prevent misconduct before it happens, hold individual wrongdoers accountable, and deter and punish recidivism. As part of the new policy, the DOJ has launched the first-ever Pilot Program Regarding Compensation Incentives and Clawbacks. The three-year Pilot Program consists of two parts. First, the DOJ Criminal Division will require that every corporate resolution include a requirement that the company develop compliance-promoting criteria within its compensation and bonus systems. Second, the Pilot Program will provide for fine reductions to companies that seek to claw back corporate compensation from wrongdoers. READ MORE

New York Stock Exchange and Nasdaq Issue Executive Compensation ‘Clawback’ Proposals

The New York Stock Exchange and the Nasdaq Stock Market have issued stock listing rule proposals four months after the SEC published Dodd-Frank clawback rules directing national stock exchanges to require listed public companies to implement policies intended to recoup bonuses paid to executives if the company is found to have misstated its financial results.

The proposals by the two exchanges are very similar but not identical. Perhaps the biggest difference is the explanation about the type of compensation that should be recovered. READ MORE

With IPOs Frozen, Startups Need To Worry About Ticking Options Clock

As the IPO pipeline remains frozen solid, more noise is being made concerning employees options expiring or being extended.

On the day it was reported that payment titan Stripe put a tentative timeline on a long-awaited IPO, news also broke that the company would look to raise billions from private investors. The funds will be used, in part, to help offset a tax bill that will come due when it modifies employees’ stock grants that are set to expire. READ MORE

U.S. DOJ Weighs In on Corporate Compensation and Clawbacks

Deputy Attorney General Lisa Monaco, in a speech at the American Bar Association’s annual National Institute on White Collar Crime, announced a number of updated policies and resource allocations aimed at combatting corporate fraud. The most significant of the announcements related to a new pilot program intended to shift accountability for corporate wrongdoing from shareholders to executives and other personnel identified as responsible for the misconduct. READ MORE

SEC’s Pay vs. Performance Rule Requires Disclosure of Relationship Between Executive Officer Compensation, Company Performance

In accordance with a mandate contained in the 2010 Dodd-Frank Act, on Aug. 25, 2022, the U.S. Securities and Exchange Commission (SEC) adopted a final rule creating Item 402(v) of Regulation S-K, requiring that public companies disclose the relationship between the compensation of their executive officers and company performance. Companies that are not exempt from the rule must comply with the new “Pay versus Performance” (PVP) disclosure requirements in applicable proxy and information statements containing executive compensation disclosure for fiscal years ending on or after Dec. 16, 2022. READ MORE

CFOs are outpacing CEOs when it comes to pay increases

How much of a base salary increase did CEOs and CFOs receive in 2022?

Compensation Advisory Partners (CAP), an executive compensation consulting firm, exclusively shared with Fortune data on salary, bonuses, and equity payouts that provides a sneak peek. The report data is based on 50 cross-industry S&P 1500 companies (with median revenue of $4.6 billion and a median market cap of $7 billion) that have fiscal year ends between Sept. 30 and Nov. 30. READ MORE

SCOTUS Ruling Increases Employer Risk Of Overtime Liability For Day Rate Compensation

On February 22, 2023, the United States Supreme Court issued a 6-3 decision holding that an employee who is paid a day rate (without any weekly guarantee) must be paid overtime under the Fair Labor Standards Act (“FLSA”) because day rates are inconsistent with the Department of Labor (“DOL”) regulations governing many exemptions from the overtime requirements. This decision compels employers – particularly those in the energy and maritime industries that commonly rely on day rates – to re-examine their payment practices.  READ MORE

DOJ Pushes Companies to Punish Misconduct With Bonus Cuts

Companies found to have committed crimes will get reduced fines from the US Justice Department if they act to claw back compensation paid to executives and employees responsible for misconduct, Deputy Attorney General Lisa Monaco said.

The department also will require every company that reaches a resolution with its criminal division to structure its compensation and bonus programs so that bad behaviors will be punished, Monaco said Thursday at a conference in Miami on white-collar crime. READ MORE

Gen Z women expect to make $6,200 less than men after graduating—salary transparency could help

As the next generation of professionals starts to think about what their salary will look like post graduation, women are more likely to lowball themselves, a new report finds.

The impacts of the gender pay gap are felt even before women enter the workforce, according to Handshake, a career platform for college students. Their latest Gen Z salary transparency report found that, after surveying 1,853 Gen Z jobseekers, women expect a $6,200 lower average salary compared to men. READ MORE