On April 21, 2017, the Trump Administration issued Executive Order 13789, which instructed the IRS to review all “significant tax regulations” issued on or after January 1, 2016 to identify as targets for modification, rescission or delayed effectiveness any regulations that (i) impose an undue financial burden on U.S. taxpayers; (ii) add undue complexity to the Federal tax laws; or (iii) exceed the statutory authority of the IRS. Having completed this review, earlier this month,…
In a recent blog post, we discussed the tax withholding and reporting complexities that can arise when employees earn equity or deferred compensation while working in more than one state. Therefore, it is timely to report on an effort at the federal level to harmonize threshold tax requirements in multi-state employment scenarios. New 30-Day Rule On June 20, 2017, the “Mobile Workforce State Income Tax Simplification Act of 2017” (H.R. 1393) passed the House of…
Companies preparing CEO pay ratio disclosure for the 2018 proxy season should not assume they will be able to rely on the Privacy Exemption with regard to gathering information about non-US employees. For a summary of the key provisions of the SEC’s final CEO pay ratio disclosure rule and the limited exemptions provided for non-US employees, see Baker McKenzie’s recent client alert. Invoking these exceptions will likely be difficult in practice. Companies should, however, generally be…
A recent Delaware Court of Chancery decision builds on prior case law and provides useful insight for companies seeking to establish an effective director compensation limit in order to avoid expensive stockholder litigation. In the case, In Re Investors Bancorp, Inc. Stockholder Litigation (2017 BL 111738, Del. Ch., No. 12327-VCS, 4/5/17), plaintiff stockholders claimed that directors breached their fiduciary duties by awarding themselves “grossly excessive compensation” under a plan that, though approved by stockholders, included…
In the world of comp lawyers, this is the time of year when every day’s to do list includes a review of one or more (sometimes, many more) equity award agreements in need of an annual update. In view of recent events in the world of plaintiff shareholders, one of the areas we’re homing in on this year is the award agreement’s tax withholding provision and its level of discretion around whether or not shares will be withheld for taxes.