Latest Posts
Search for:
Author

Victor Durham-Flores

Browsing

Beyond Whole Shares: Implementing Fractional Shares in Employee Share Programs

By and 1 Min Read

With brokers increasingly able to facilitate equity award transactions involving fractional shares and companies recognizing their value, offering fractional shares under share incentive plans has gained significant traction in recent years. Integrating fractional shares into employee share incentive plans brings greater flexibility, inclusivity, and administrative efficiency, enabling access to higher-priced stock, broadening participation, and simplifying tax and dividend processes and offering tangible benefits for both companies and employees. Successful implementation requires thoughtful planning: from ensuring…

ISS’s Benchmark Policy Changes for 2026 will Impact Equity Plan Proposals

By and 4 Mins Read

As we approach the 2026 proxy season, Institutional Shareholder Services (ISS) has announced a variety of compensation-related updates to its 2026 benchmark proxy voting policies. Among the most notable changes are revisions to the Equity Plan Scorecard (EPSC) used by ISS to evaluate issuer proposals for shareholder approval of equity incentive plans. Under the policy updates, the EPSC will add a new scoring factor addressing individual award limits for non-employee directors and will penalize equity…

Tax and Legal Considerations for Global Tender Offers

By , , and 1 Min Read

Private company tender offers and similar liquidity programs have become increasingly common in recent years, offering service providers a way to realize value from their equity awards and/or shares—without requiring the company to enter public markets. Our latest article provides a high-level overview to help privately held companies navigate the tax and legal complexities of launching a global tender offer. Structured in a FAQ format, the piece addresses the most frequent questions and challenges we encounter when U.S.…

T+1 is Right Around the Corner – Time to Confirm Your Equity Award Tax Readiness

By and 5 Mins Read

The Securities and Exchange Commission (SEC) last year amended rules under the Securities Exchange Act of 1934 to shorten the securities transaction settlement cycle for most broker-dealer securities transactions, from “T+2” to “T+1,” meaning that securities transactions will need to be settled within one business day of the transaction date (“T”), effective as of May 28, 2024. Impact on Equity Awards The new SEC-required settlement timing will directly impact equity awards that are settled through…

Don’t Miss California’s New Noncompete Notice Requirement (Deadline 2/14/24): Review Equity Award Agreements + Other Employment-Related Contracts ASAP to Avoid Costly Penalties

By , , and 4 Mins Read

As many readers likely know, last fall California doubled-down on the state’s hostility to noncompete agreements. Assembly Bill 1076 codified the landmark 2008 Edward v. Arthur Andersen decision that invalidated all employment noncompetes, including narrowly tailored ones, unless they satisfy a statutory exception.AB 1076 also added new Business & Professions Code §16600.1, requiring California employers to notify current (and certain former) employees that any noncompete agreement or clause to which they may be subject is void (unless it falls within one of…

Stock Exchanges Extend Proposed Effective Date for Dodd-Frank Clawback Rule

By , and 3 Mins Read

In welcome news for U.S. listed companies, both the New York Stock Exchange (NYSE) and NASDAQ have extended the effective date of their proposed listing standards to implement the Dodd-Frank clawback requirement to October 2, 2023 (see the NYSE Amendment and Nasdaq Amendment, filed with the Securities and Exchange Commission (SEC) on June 5, 2023 and June 6, 2023, respectively). If the SEC approves the listing rules as proposed, listed companies will have until December…

Implications of SEC’s Final 10b5-1 Rules for Equity and Benefit Plans

By , , and 10 Mins Read

On December 14, 2022, the SEC adopted final rules amending Rule 10b5-1 under the Securities Exchange Act of 1934 (the “Exchange Act”), which provides an affirmative defense to insider trading for trades made under a written plan adopted when not aware of material nonpublic information (“MNPI”). The final rules add several new conditions for the availability of the affirmative defense and require new quarterly and Form 4 disclosures regarding the Rule 10b5-1 trading arrangements of…

Updated ISS Equity Plan FAQs for the 2023 Proxy Season

By and 4 Mins Read

On December 16, 2022, Institutional Shareholder Services (“ISS”) released its updated FAQs on Equity Compensation Plans, which will apply to its “Equity Plan Scorecard” evaluation of equity plan proposals in shareholder meetings held on or after February 1, 2023. Under the Equity Plan Scorecard, ISS scores a proposed equity plan based on factors relating to (i) plan “cost” under a “Shareholder Value Transfer” model, (ii) plan features and (iii) company grant practices. Although the only…

SEC Releases Final Rule on Clawback of Incentive Compensation

By , , and 2 Mins Read

On October 26, 2022, the SEC adopted its much-anticipated final clawback rules requiring U.S. listed issuers to: ​The rule, known as Rule 10D-1, directs national securities exchanges to establish implementing listing standards within 90 days from publication of the final rule in the Federal Register. Companies that fail to comply with the rule may be delisted. U.S. listed issuers who do not already have a clawback policy should begin preparations to design, adopt and implement…

New Pay Versus Performance Disclosure Rule Effective for 2023 Proxy Season

By , , , and 1 Min Read

It’s been 12 years in the making, but the SEC has finally released rules to implement the “pay versus performance” disclosure required by Section 953(a) of the Dodd-Frank Act. The new disclosure of the relationship between executive compensation “actually paid” and financial performance is required to be included in proxy statements or information statements for fiscal years ending on or after December 16, 2022 and is therefore effective for the upcoming 2023 proxy season. For a…

Load More