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ISS Releases Executive Compensation and Equity Plan Policy Updates for the 2025 Proxy Season

By 4 Mins Read

Institutional Shareholder Services (ISS) has released its executive compensation and equity plan policy updates for the 2025 proxy season, reflecting its approach to determining its proxy voting recommendations on say on pay and equity plan proposals for shareholder meetings held on or after February 1, 2025. The updates to ISS’s existing policies are fairly light overall, but it is notable that there will be heightened scrutiny of the design and disclosure of performance-vesting equity awards,…

C-Suite Safety and Employer-Provided Security – Is Your Company’s Security Program Designed with Tax Considerations in Mind?

By and 5 Mins Read

News headlines reinforce what every business knows – that there are business reasons for providing security to C-suite executives.  Those executives are seen as the face of the company and often bear the brunt of the public’s gripes against a company.  Prominent business leaders, such as business executives, are often the targets of threats due to their affiliation with the company and are in need of protection as a result. Ensuring their safety is often…

IRS Introduces New Form 15620 for Section 83(b) Elections

By 3 Mins Read

On November 7, 2024, for the first time, the Internal Revenue Service (IRS) has made available a form on which elections under Section 83(b) of the Internal Revenue Code may be made. This new Form 15620 provides a standardized method for elections and should streamline the process of making an 83(b) election. However, the new form is not required to be used, and taxpayers may continue to use their own form of election, provided it…

Trump Administration Impact: Five Areas to Watch

By 2 Mins Read

As Donald Trump prepares to take office as the 47th United States president, we outline the policy positions we expect to see across five key areas that will have significant implications for business. Trump has pledged to lower taxes, cut regulation and impose new tariffs on imported goods. The ability of the new President to implement his plans will be heavily impacted by the makeup of Congress. With President-elect Trump’s party controlling the Senate, and…

Time to Revisit the use of Certain Mandatory Arbitration Provisions in ERISA Plans

By and 7 Mins Read

Two more federal Circuit Courts have weighed in on whether mandatory arbitration provisions with class action waivers are enforceable under the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”). With recent rulings in Cedeno v. Sasson, 100 F.4th 386 (2d Cir. 2024) and Parker v Tenneco, 2024 WL 3873409 (6th Cir. Aug 1, 2024), the Second and Sixth Circuits now join the Third, Seventh, and Tenth Circuits in holding that arbitration provisions…

IRS Corporate Aircraft Initiative Results in Unexpected Reconsideration of SIFL Rates

By 6 Mins Read

Earlier this year, the Internal Revenue Service (“IRS”) announced it would be using advanced analytic techniques and additional funding to audit tax compliance by businesses when their business aircraft are used for personal reasons by executives. The IRS’s Large Business and International Division also added a “Business Aircraft Campaign” to its list of compliance campaigns. This focus by the IRS appears to have triggered calls for it to revisit the manner in which personal use…

Proposed Regulations on Stock Buyback Excise Tax Shed Light on Compensation Plan Transactions

By and 1 Min Read

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…

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…

Additional 2023 SEC Guidance on Pay Versus Performance Disclosure

By 13 Mins Read

On September 27, 2023 and November 21, 2023, the Securities and Exchange Commission (SEC) issued additional Compliance & Disclosure Interpretations (CDIs) clarifying certain technical aspects of the pay versus performance (PVP) disclosure rules under Item 402(v) of Regulation S-K[1]. These CDIs are intended to supplement the CDIs covering PVP disclosure that were issued by the SEC on February 10, 2023.[2] By way of background, covered public companies must comply with the PVP disclosure rules beginning…

A Cautionary Tale: US Estate Tax May be Due on Equity Awards/Shares Held by Non-US Residents

By 6 Mins Read

One of the biggest sleeper issues (in my opinion) for US companies when granting equity awards to non-US employees or other service providers is the fact that their heirs may be assessed with US estate tax and be required to file an estate tax return in the US if the individual dies while holding equity awards or shares. US Estate Tax Exemptions Individual US taxpayers (i.e., US citizens and non-US citizens who are domiciled in…

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