Dialogue

The latest reporting, opinion and research on executive compensation. We don’t necessarily agree with it all, but we provide it here for consideration.

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Week of
January 25, 2016

Quick Picks

Top 10 Topics for Directors in 2016: Executive Compensation | Akin Gump Strauss Hauer & Feld LLP | January 26, 2016

With 2016 proxy season approaching, lawyers from Akin Gump Strauss Hauer & Feld discuss important items related to executive and director compensation, particularly in light of the SEC’s recent rulemaking. One issue stirring debate this year, although it won't officially take effect until fiscal 2017, is the CEO pay ratio disclosure rules. The authors suggest directors should begin thinking about the best methodology for their company, and about how they might explain their pay ratio in the proxy statement. Directors should also keep in mind recent litigation when setting their own compensation, and consider allowing shareholders to vote on limits to director awards. Read more

Alternatives to Equity Shares in a Low Stock Price Environment | Pay Governance LLC | January 30, 2016

Many Compensation Committees are faced with falling stock prices and an uncertain financial outlook for 2016, forcing some to rethink their long-term incentive grants. Steve Paekla of Pay Governance cautions Committees to be careful when making share grants in a low stock price environment. The author suggests that if the Committee is considering adjusting the grants to deliver equivalent dollar value that they be sensitive to investor concerns, and consider the optics and perceptions of granting an executive two or three times the number of shares granted in the previous year. Committees also need to understand burn rate and share depletion implications before adjusting their grants. Read more

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