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Pay rose at historically fast rates for low-wage workers in the U.S. between 2019 and 2022, even after adjusting for inflation, according to an analysis from the Economic Policy Institute released Thursday morning.
What happened: The tight labor market and disruptions from the pandemic gave folks at the lowest end of the pay scale unprecedented amounts of leverage over employers. READ MORE
Paid time off (PTO) is not considered part of an employee's salary, so it can be docked without jeopardizing the employee's exempt status, the 3rd U.S. Circuit Court of Appeals recently ruled. In a March 15 opinion, the court held that PTO is a fringe benefit with monetary value, not a component of salary under federal law.
"Even though the employer prevailed in this case, one key lesson is that employers must carefully analyze any plan that would result in taking money away from exempt employees to ensure that the exemption is not lost," said Steven Suflas, an attorney with Holland & Hart in Salt Lake City. READ MORE
Salary transparency laws are seen as a way to give job seekers the insight they need to make informed career decisions. While eight states already have laws in place and 15 states are considering it, do organizations really have employees' best interests in mind?
Job search site Adzuna ranked which states boasted the most job postings with salary ranges of $50,000 or more, and found that five states with salary transparency laws made it to the top 15, namely California, Washington, Maryland, Colorado and New York. Granted, only New York City's salary transparency law is in full effect — the state-wide law doesn't go into effect until September 17. READ MORE
“Honesty is the best policy.”
This is a phrase many people have used or lived by. It’s often used as a guiding principle, so it’s hard to accept when that energy is not reciprocated, regardless of the space.
One of the spaces where this concept is most covert is job seeking. Those interested in jumping into the often tumultuous space of job hunting come to the table with a list of requirements that’s best for them. READ MORE
The Dodd-Frank Act of 2010 added Section 10D to the Exchange Act, which requires the SEC to direct national securities exchanges[1] to prohibit the listing of issuers that do not develop and implement a policy for the recoupment of compensation as specified in Section 10D. On Oct. 26, 2022, the SEC announced that it adopted a final rule (the Release) implementing Section 10D that will impact more than 5,300 exchange-listed companies. This rule requires listed companies to implement, disclose and enforce a compensation recovery policy to claw back or otherwise recover excess incentive-based compensation that executive officers received based on financial reporting measures that are later restated. Thereafter, national securities exchanges were obligated to submit by Feb. 27 proposed listing standards that require listed companies to adopt, disclose and enforce a “compensation recovery policy.” READ MORE
Section 409A of the Internal Revenue Code of 1986, as amended (409A), was enacted into law in 2004 to impose statutory requirements on “nonqualified deferred compensation plans, programs or arrangements” (collectively referred to herein as a “plan” or “plans”). In general, 409A requires all nonqualified deferred compensation plans to specify in writing, upon the inception of the plan, the “time” and “form” of payment and, except in limited circumstances, prohibits the acceleration or subsequent deferrals after a “plan” has been established. A violation of these requirements results in all vested (whether or not paid) amounts becoming immediately taxable as compensation income, subject to all applicable income and payroll tax withholding and an additional 20% penalty tax on the compensation income. READ MORE
The current banking crisis sparked by the recent implosion of Silicon Valley Bank (SVB) has several interrelated causes. To wit, inadequate bank equity capital, misguided capital structure of SVB’s client companies (high-tech high-growth ventures) and misaligned bank executive compensation. Additionally, the risk from duration mismatch between SVB’s assets and liabilities was a major cause of its implosion. READ MORE
CEO pay is an important metric for many investors. However, reported compensation often has been a snapshot in time that may not always reflect the complete pay package – until now.
The Securities and Exchange Commission last August enacted a rule requiring disclosure of “compensation actually paid” for executives, accounting for changes in stock award values as prices fluctuate. The rule already has shown that the true value of some pay packages can differ from traditionally reported total compensation, sometimes by tens of millions of dollars. READ MORE
The U.S. Department of Justice (DOJ) on March 3, 2023, unveiled a new pilot program and announced several important updates to its Evaluation of Corporate Compliance Programs (ECCP) regarding corporate compensation incentives and clawbacks. These updates build on and clarify Deputy Attorney General (DAG) Lisa Monaco’s policy announcements from September 2022 regarding corporate criminal enforcement.
This most recent guidance provides valuable insight into the DOJ’s expectations regarding compliance-conscious compensation. However, implementing this guidance will require navigating complex issues of labor and employment law, both domestic and foreign, and will produce potentially significant shifts in corporate culture around compensation. READ MORE
Executive compensation, or what is effectively realizable pay, swings from as much as $1 billion to negative $644 million, proxies from early filers show. READ MORE
The Fair Labor Standards Act of 1938 (“FLSA”) created the right to a minimum wage and overtime pay. The FLSA also provides exemptions to overtime pay requirements for certain employees. Under the “bona fide executive” exemption, “highly compensated employees” are exempt from overtime if performing at least one qualifying job duty. However, on February 22, 2023, the United States Supreme Court, in its 6-3 decision in Helix Energy Solution Group, Inc. v. Hewitt, clarified that highly compensated employees paid on a “day-rate” do not qualify for this exemption because a day-rate does not satisfy the salary basis test. READ MORE
On August 25, 2022, the Securities and Exchange Commission (SEC) adopted final rules implementing the pay versus performance disclosure required by Section 935(a) of Dodd-Frank, effective for executive compensation disclosures for fiscal years ending on or after December 16, 2022 (PVP Disclosure Rules). READ MORE
When there is uncertainty, business leaders will adjust to the new reality. Upon entering this new phase, Meta CEO Mark Zuckerberg called for a “year of efficiency.” In addition to the 11,000 layoffs in November, Zuckerberg announced that 10,000 more people would be let go. Executives at other companies will follow Zuckerberg’s lead. They’ll tell their board of directors that the organization must enact fiscally responsible measures to get through a potentially turbulent time and likely recession. READ MORE
On March 3, 2023, AAG Polite announced the launch of the Division’s Pilot Program on Compensation Incentives and Clawbacks.
The Pilot Program comes less than six months after Deputy Attorney General (“DAG”) Lisa Monaco’s September 2022 announcement of changes strengthening DOJ’s corporate enforcement policy. As noted in our prior client alert on those policies, DOJ has stated that it wants to “empower” companies to “do the right thing” by rewarding companies that invest in compliance and that identify and voluntarily disclose misconduct in a timely manner. READ MORE
Total compensation for the CEO of SVB in 2022 was more than $9.9 million, including a $1.5 million cash bonus
The demise of Silicon Valley Bank amid a run on deposits has shined a light on stock sales carried out by officers at the bank's parent, SVB Financial Inc., days before the bank failed. READ MORE
Women face a wage gap at every point in their careers, a gap that gets worse as they age and progress through their work lives.
In 2021, the most recent year for which federal data is available, women working full-time in the U.S. were paid 84 cents for every dollar paid to a man, the National Women’s Law Center reports. READ MORE
As turbulent economic conditions persist and layoffs become more commonplace, some high-profile tech CEOs have elected to take large pay cuts to preserve cash flow. This has sparked a larger conversation about how, exactly, executives’ salaries are decided.
In February, Eric Yuan, CEO of Zoom, told his staff he would cut his pay by 98% and forgo his yearly bonus. Similarly, Tim Cook, CEO of Apple, plans to cut his salary by 40% in 2023, bringing his annual target salary to $49 million. READ MORE
After new pay transparency laws in California and New York City faced rocky starts, employer compliance is up not just in two of the biggest labor markets in the U.S., but across the country.
About three quarters of job listings in New York City and two thirds in California now include pay information, according to data compiled by Roger Lee, co-founder of Comprehensive.io, a pay data and analytics site. Nationally, salary ranges appear on 44% of posts on Indeed, up from 18% three years ago, data released Tuesday by the job search site shows. READ MORE
A growing number of US states and localities have laws mandating pay transparency, with requirements varying from state to state. Beginning in 2021, Colorado required all companies to include a salary range and benefits on their job listings. A law put on the books in New York City last fall is similar, adding a “good faith” range in pay on each posting. And states like California and Rhode Island make employers provide a salary range only to candidates that request it during the interview process. READ MORE
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