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NEWS
7 August 2023
ENFORCEMENT OF DODD-FRANK CLAWBACK POLICIES UNDER FOREIGN LAW
article

Duncan A. W. Abate, Miriam Bruce, Aline Fidelis, Christopher Fisher, Régine Goury, Julien Haure, Dr. Hagen Köckeritz, Ryan J. Lieb, Laura D. Richman, Jad A. Taha,  Jennifer C. W., Tam Hong 

Executive pay
Finance, tax and accounting
Executive plans
Stock options
France
Germany
Greater China
Hong Kong
Singapore
UK and Channel Islands
USA

The article discusses the enforcement of Dodd-Frank clawback policies under foreign law, focusing on executive compensation. The US SEC's Rule 10D-1 mandates the recovery (clawback) of incentive-based executive compensation in the event of accounting restatements. The NYSE and Nasdaq proposed listing standards to comply with this rule. The article explores how clawback policies could be enforced in various countries including Brazil, China, France, Germany, Hong Kong, Singapore, the United Arab Emirates, and the United Kingdom. It addresses aspects such as enforceability under local law, deducting amounts from future compensation, and provisions to enhance enforcement. The application of these policies varies across jurisdictions based on legal frameworks and regulatory guidelines.

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NEWS
3 August 2023
EXPAND ACCESS TO ESOPs TO PROTECT AMERICANS’ RETIREMENT SAVINGS IN A VOLATILE ECONOMY
article

Stephanie Silverman

General
USA

The article discusses the idea of expanding access to employee stock ownership plans (ESOPs) in order to protect Americans' retirement savings in a volatile economic environment. It points out that American retirees faced a 23% loss in their 401(k) savings in 2022, and the ongoing financial uncertainties caused by various factors necessitate finding ways to ensure retirement security. The article highlights the benefits of ESOPs, where employees have ownership in the companies they work for. A survey by the National Center for Employee Ownership (NCEO) indicates that workers at ESOP-owned businesses have greater retirement security, better employee retention, and superior retirement savings compared to workers in other companies. The article also mentions bipartisan legislation introduced to promote and expand employee ownership in private companies.

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NEWS
7 August 2023
MEGA GRANTS: WHY WOULD A BOARD APPROVE NINE-FIGURE CEO PAY?
article

Brian Tayan and David F. Larcker

Executive pay
Trending now
Executive plans
Performance shares
USA

The article discusses the practice of awarding "mega grants" to CEOs, which are large, one-time equity awards with long vesting periods, often granted in addition to or in lieu of annual awards. Mega grants are intended to provide significant incentives for CEOs to achieve long-term targets. The practice of mega grants has resurged in recent years, with CEOs receiving nine-figure awards, even though they were less popular due to shareholder criticism in the past. The article explores the reasons behind this change, including notable instances such as Tim Cook's mega grant at Apple and Elon Musk's performance-vested stock-option package at Tesla. The controversy surrounding mega grants is examined, along with proxy advisory firms' skeptical views and shareholder reactions. The article also delves into the characteristics of mega grants, such as recipient types, tenure, grant size, equity type, term, performance triggers, and more. It also explores the rationale behind issuing mega grants and the role of compensation consultants in recommending them. Finally, the article discusses the stock price reaction to mega grant announcements and raises questions about the impact of mega grants on CEO incentives and company performance.

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NEWS
29 September 2023
SEC STAFF ISSUES ADDITIONAL PAY VERSUS PERFORMANCE COMPLIANCE & DISCLOSURE INTERPRETATIONS
article

Skadden, Arps, Slate, Meagher & Flom LLP 

Finance, tax and accounting
Legal and regulatory
USA

The SEC's Division of Corporation Finance issued 10 new Compliance & Disclosure Interpretations (C&DIs) on September 27, 2023, supplementing previous guidance on pay-versus-performance disclosure rules.

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NEWS
20 September 2023
INSTACART CEO SAYS ITS IPO WAS FOR EMPLOYEES AS THE GROCERY DELIVERY SERVICE LETS WORKERS SELL THEIR STOCKS
article

SOURCE: Yahoo! Finance

Private and pre-IPO companies
Stock options
USA

Instacart’s long-awaited initial public offering on Tuesday made it one of the largest companies to go public this year, marking a potential turning point in the recent lull of public listings. But the grocery delivery service's employees could be the real victors of the stock market debut, as the company relies on sales from existing shareholders, including workers, to drive its stock price. “This IPO is not about raising money for us. It's really about making sure that all employees can have liquidity on stock that they worked very hard for,” Instacart CEO Fidji Simo told CNBC’s Dierdre Bosa on Tuesday.

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NEWS
26 September 2023
THERE'S ANOTHER GENDER PAY GAP: STOCK OPTIONS
article

SOURCE: Wall Street Journal

Trending now
Cash deferral
Choice plans
Discount shares
Employee stock purchase plans (ESPP)
Equity deferral
Executive plans
Non-qualified plans
Performance cash
Performance shares
Restricted shares
Save as you earn (SAYE)
Share incentive plans (SIP)
Stock appreciation rights (SAR)
Stock options
UK and Channel Islands
USA

Women often don’t know what to ask for, experts say. And companies don’t tell them.

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NEWS
12 September 2023
WHEN IT COMES TO COMPENSATION, MORE EQUITY ISN'T ALWAYS BETTER
article

SOURCE: Harvard Business Review

Communications
Design and strategy
Private and pre-IPO companies
Cash deferral
Choice plans
Discount shares
Employee stock purchase plans (ESPP)
Equity deferral
Executive plans
Non-qualified plans
Performance cash
Performance shares
Restricted shares
Save as you earn (SAYE)
Share incentive plans (SIP)
Stock appreciation rights (SAR)
Stock options
USA

The authors research found that people often overestimate the value of stock options when assessing a startup job offers. They incorrectly believe that a higher number of shares translates into superior compensation even when it doesn’t. Five steps can help you avoid this mistake.

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NEWS
1 August 2023
BDO TO ESTABLISH EMPLOYEE STOCK OWNERSHIP PLAN AS PART OF U.S. RESTRUCTURING
article

SOURCE: Wall Street Journal

Design and strategy
Stock options
USA

BDO USA plans to establish an employee stock ownership plan (ESOP) for 10,000 employees to address the shortage of accountants and retain talent. The ESOP will allow employees to have a stake in the company. BDO partners will sell 42% of their shares, and the plan will take about 20 years to fully vest. The firm secured $1.3 billion in private debt to fund the ESOP. This move aims to modernize the accounting industry's traditional business model and attract and retain skilled workers.

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NEWS
9 August 2023
EMPLOYEE SHARE OWNERSHIP IS A PERK WORTH EXPANDING | FINANCIAL TIMES
article

SOURCE: Financial Times

Design and strategy
Employee stock purchase plans (ESPP)
UK and Channel Islands
USA


The article discusses how few companies offer equity ownership to most employees, despite its potential benefits for engagement and wealth equality. It highlights the need for well-designed plans, policy support, and financial education to make this practice more widespread. Turning more stakeholders into capitalists can align with stakeholder capitalism principles.

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NEWS
14 September 2023
STOCK-BASED COMPENSATION GUIDE
article

SOURCE: PwC

Finance, tax and accounting
Cash deferral
Choice plans
Discount shares
Employee stock purchase plans (ESPP)
Equity deferral
Executive plans
Non-qualified plans
Performance cash
Performance shares
Restricted shares
Save as you earn (SAYE)
Share incentive plans (SIP)
Stock appreciation rights (SAR)
Stock options
USA

PwC's updated Stock-based compensation guide covers accounting principles, measurement, vesting, expense attribution, and classification for stock-based compensation, with insights and references to FASB guidance.

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