On April 12, 2024, Treasury and the IRS published proposed regulations on the 1% excise tax imposed by Internal Revenue Code Section 4501 on the value of stock repurchased by a US public corporation or a 50% affiliate. The proposed regulations elaborate on and clarify compensation-related issues that arose in Notice 2023-2, December 27, 2022 (addressed in our prior blog post), including: For a full discussion of these topics and practical tips on next steps, we…
The short answer is “no.” Typically the enforceability of non-compete clauses has been subject to state law and more recently, many states have imposed limitations on the enforceability of non-competes. Some states, like California, North Dakota and Oklahoma, ban them entirely. However, the Federal Trade Commission (“FTC”) on January 5, 2023 issued a proposed rule that would significantly restrict the use of non-compete clauses between employers and employees as a matter of federal law. The…
There has recently been a great deal of interest in the grant of a profits interest. A profits interest is a beneficial form of incentive for an individual who performs services for a partnership or other pass-through entity, like a limited liability company. Bottom line, a profits interest (also commonly known as a “carried interest”) is a non-capital interest in the profits of a partnership or a membership interest in a limited liability company taxed…
The Baker McKenzie global pensions team is delighted to announce the launch of the Global Pensions Heatmap. The heatmap sets out key information and principal pension issues that companies should be aware of in over 40 jurisdictions across the world and provides a snapshot of Baker McKenzie’s international transactional pensions presence and expertise. Organisations are able to identify the type, complexity and transaction requirements of pensions funds across multiple jurisdictions all in one place by…
Many employers will be surprised to learn that the American Rescue Plan Act of 2021 (“ARPA”), which was signed into law on March 11, 2021 and is primarily intended to provide an economic stimulus package of $1.9 trillion, expanded the group of covered employees under section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”), to include the five most highly compensated employees in addition to certain of the individuals already included…
After months of partisan bickering and Senate inaction, Congress finally passed another round of COVID-19 relief legislation as part of the Consolidated Appropriations Act, 2021, P.L. 116-260, (“CAA”), which was signed into law on December 27, 2020. We provide a summary of the tax-related CAA provisions and key modifications to the Paycheck Protection Program (“PPP”), before discussing President Biden’s tax agenda for 2021. The CAA’s tax provisions focus primarily on providing economic relief to taxpayers…
With the COVID-19 pandemic impacting all facets of business, this webcast focuses on the implications for employers and their pension arrangements. Increased economic pressure, new legislation and recent government guidance is impacting how employers are navigating these changes across the globe. With a spotlight on the UK, US and Australia, we discuss key pension issues and practical steps employers should be taking moving forward. Click here to watch the podcast.
Effective as of February 1, 2020 Institutional Shareholder Services (ISS) will increase its focus on gender diversity within corporate boards of directors with its updated policy on diversity in corporate board composition. This policy was announced in its “Proxy Voting Guidelines Updates for 2020” published on November 11, 2019. After publishing its original board composition diversity policy, which allowed for a one-year transition period, ISS now increases the pressure on public companies to make a…
The California Consumer Privacy Act (“CCPA”) takes effect on January 1, 2020 and imposes a wide range of new requirements for the collection and processing of personal data of California residents. Under the CCPA, “consumer” is defined broadly as a natural person who is a California resident. Assembly Bill 25 (“AB 25”), signed into law on October 11, 2019, provides a temporary and limited reprieve for employee data by establishing an exemption to the CCPA’s…
Proxy advisors (e.g., Institutional Shareholder Services (“ISS”) and Glass, Lewis & Co (“Glass Lewis”)) have played a substantial role in the design of executive compensation for many years. This has been due to the strong reliance of institutional investors (as well as investment advisors) on the proxy voting recommendations of firms such as ISS and Glass Lewis. Some commentators have viewed the proxy advisors as being quasi-regulators without any formal oversight of their potential conflicts…