Thursday, November 18, 2010 | Kenneth A. Mason
Filed under:
Executive Compensation, Nonqualified Plans, Deferred Compensation
Employers and their executives should note a year-end deadline for correcting certain failures to comply with the “documentation” requirements of Section 409A of the Internal Revenue Code. As explained in our March 2010 article, IRS Notice 2010-6 created a program for correcting such failures, but with many of its generous transitional rules expiring on December 31, 2010.
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Tuesday, August 18, 2009 | Gregory L. Ash
Filed under:
Executive Compensation, Fiduciary Duties
When corporate executives also serve as ERISA fiduciaries for employee stock ownership plans (“ESOPs”), their business decisions may become subject to heightened legal scrutiny. That was the holding of the Ninth U.S. Court of Appeals in a recent case in which ESOP participants raised ERISA challenges to a CEO’s compensation package. The decision also upheld a California federal trial court’s ruling that barred the executives from using corporate assets to pay their defense costs. (Johnson v. Couturier, 7/27/09). Although this decision is at odds with holdings from the Eighth U.S. Circuit Court of Appeals (whose jurisdiction includes Missouri), it may nonetheless give ESOP fiduciaries pause when making certain business decisions.
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Sunday, April 01, 2007 | Gregory L. Ash
Filed under:
Executive Compensation, Nonqualified Plans
Since Congress enacted sweeping new legislation governing nonqualified deferred compensation arrangements two years ago (in the form of Tax Code Section 409A), the focus of the benefits community has been on how those arrangements are treated for tax purposes. In light of the publication of final Section 409A regulations this month, this undoubtedly will continue to be the case. But in the midst of the tax discussion, it is important not to lose track of the other federal law that governs these arrangements – ERISA.
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Tuesday, August 01, 2006 | Gregory L. Ash
Filed under:
Executive Compensation, Reporting and Disclosure
Final rules adopted by the Securities and Exchange Commission on July 26, 2006, will require companies with publicly-traded securities to significantly alter the way that they disclose their executive compensation practices in proxy and registration statements. These rules are generally designed to require the disclosure of all of the compensation that executives receive. They expand the list of executives for whom disclosures must be made, substantially modify the format and content of the required disclosures, and place heightened scrutiny on options-granting practices.
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