Executive Compensation Law Blog

For the Latest Updates on Law Affecting Executive Compensation

As discussed in our December 16, 2010 blog article, the IRS issued final regulations in 2009 under Section 6039 of the Internal Revenue Code (the “Code”) that require employers to annually furnish each employee who exercised incentive stock options (“ISOs”) or sold or otherwise transferred shares acquired under an employee stock purchase plan (“ESPP”) during a year with a detailed information statement by January 31 of the following year.  In addition, employers must generally file an information return with the IRS by February 28 of the following year, or by March 31 for employers filing electronically.  These due dates…
As discussed in our December 16, 2010 blog article, the IRS issued final regulations in 2009 under Section 6039 of the Internal Revenue Code (the “Code”) that require employers to annually furnish each employee who exercised incentive stock options (“ISOs”) or sold or otherwise transferred shares acquired under an employee stock purchase plan (“ESPP”) during a year with a detailed information statement by January 31 of the following year. In addition, employers must generally file an information return with the IRS by February 28 of the following year, or by March 31 for employers filing electronically.…
As discussed in our December 16, 2010 blog article, the IRS issued final regulations in 2009 under Section 6039 of the Internal Revenue Code (the “Code”) that require employers to annually furnish each employee who exercised incentive stock options (“ISOs”) or sold or otherwise transferred shares acquired under an employee stock purchase plan (“ESPP”) during a year with a detailed information statement by January 31 of the following year. In addition, employers must generally file an information return with the IRS by February 28 of the following year, or by March 31 for employers filing electronically.…
Last month, Energy XXI, Ltd. (“EXXI”), a publicly-traded oil and gas exploration company, saw its former Chief Executive Officer charged with various securities law violations by the Securities and Exchange Commission (“SEC”). The SEC seeks to have the CEO pay civil money penalties and be barred from any officer or director role with any issuer of registered securities.…
As discussed in our December 16, 2010 blog article, the IRS issued final regulations in 2009 under Section 6039 of the Internal Revenue Code (the “Code”) that require Employers to annually furnish each employee who exercised incentive stock options (“ISOs”) or sold or otherwise transferred shares acquired under an employee stock purchase plan (“ESPP”) during a year with a detailed information statement by January 31 of the following year. In addition, Employers must generally file an information return with the IRS by February 28 of the following year, or by March 31 for Employers filing electronically.…
In In re Investors Bancorp, Inc. Stockholder Litigation, No. 169, 2017, 2017 WL 6374741 (Del. Dec. 13, 2017), the Delaware Supreme Court limited the ability of directors to assert the stockholder ratification defense when facing a challenge to their implementation of equity incentive plans (“EIP”). When properly invoked, the stockholder ratification defense entitles directors to have a court review their conduct under the more deferential business judgment rule standard, rather than the more stringent “entire fairness” standard. The Delaware Supreme Court held that where stockholders approve an EIP containing general parameters that afford directors discretion to determine specific awards,…
On Friday, December 15, 2017, Congress put forth a final version of the Tax Cuts and Jobs Act, which would signify the largest piece of tax legislation in over thirty years if signed into law. Early in the morning on December 20, the Senate voted to pass the bill, and the House later approved it on the same day. The bill is on its way to President Trump’s desk, and most expect the bill to be signed into law when he receives the package just in time for Christmas. So what does this mean from an executive compensation standpoint?…
As an update to our previous blog post entitled, Senate Stays Up Late to Approve Tax Bill, dated December 5, 2017, the Senate and the House appear to have come to an agreement on the final version of the tax bill that will be voted on by Congress. While nothing official has been stated or released regarding the final bill, word from the latest news outlets revolves mostly around changes to corporate and individual tax rates. One interesting thing to note is that the current agreement would allegedly repeal the corporate alternative minimum tax, which was reflected in the Senate’s…
Early in the morning on Saturday, December 2, 2017 (it was nearly 2 AM Eastern!), the Senate voted 51-49, drawn mostly along party lines, to pass its version of the tax reform bill described in our previous blog posts Thanksgiving Tax Frenzy – New Tax Bill Proposes Executive Compensation Changes That Could Derail Deferred Compensation and Stock Options on November 14 and Startups Have Much To Be Thankful For – Senate Amendments to New Tax Bill Remove Deferred Compensation and Stock Options from Endangered Species List on November 16. Members of the Senate had only a few hours to review what…
As discussed in our November 14, 2017 blog post, Thanksgiving Tax Frenzy – New Tax Bill Proposes Executive Compensation Changes That Could Derail Deferred Compensation and Stock Options, the evolution of the Tax Cuts and Jobs Act bill in both the House and the Senate is very fluid. No sooner had we posted the previous entry when the Senate had modified its Chairman’s Mark on November 14, 2017. Start-ups and other entities granting executive compensation will have much to be thankful for because of this latest markup. This update reflects the state of the tax bills through November 15, 2017.…
Congress has been in a frenzy to try and get new tax legislation passed by Thanksgiving, and members of the House and Senate would presumably rather be enjoying a feast rather than drafting and analyzing additional tax provisions when Turkey day rolls around. This blog addresses the executive compensation related provisions in the proposed new tax legislation which is likely to be voted on in the very near future.…
Many privately held companies rely on equity compensation awards (typically stock options) to recruit, retain and motivate key employees and other service providers.  The issuance of such equity compensation awards generally needs to comply with, among other things, federal securities laws.  Most commonly, private company issuers of equity compensation awards rely on federal Rule 701 which provides an exemption from the registration requirements of the Securities Act of 1933.…
As discussed in our December 16, 2010 blog article, the IRS issued final regulations in 2009 under Section 6039 of the Internal Revenue Code (the “Code”) that require Employers to annually furnish each employee who exercised incentive stock options (“ISOs”) or sold or otherwise transferred shares acquired under an employee stock purchase plan (“ESPP”) during a year with a detailed information statement by January 31 of the following year. In addition, Employers must generally file an information return with the IRS by February 28 of the following year, or by March 31 for Employers filing electronically.…
In a news conference today President Obama addressed rules and proposed regulations announced Thursday intended to help the U.S. fight tax evasion and other crimes connected to anonymous offshore companies and accounts.  The announcements come after a month of intense review by the administration following the first release of the so-called Panama Papers, millions of documents stolen or leaked from Panamanian law firm Mossack, Fonseca.  The papers have revealed a who’s who of international politicians, business leaders, sports figures and celebrities involved with financial transactions accomplished through anonymous shell corporations.…
As discussed in our December 16, 2010 blog article, the IRS issued final regulations in 2009 under Section 6039 of the Internal Revenue Code (the “Code”) that require Employers to annually furnish each employee who exercised incentive stock options (“ISOs”) or sold or otherwise transferred shares acquired under an employee stock purchase plan (“ESPP”) during a year with a detailed information statement by January 31 of the following year. In addition, Employers must generally file an information return with the IRS by February 28 of the following year, or by March 31 for Employers filing electronically.…
On April 30, 2015, the Court of Chancery of the State of Delaware rendered an important case decision in a procedural matter dealing with the equity compensation  of non-employee members of a company’s board of directors (see Calma v. Templeton, Delaware Court of Chancery C.A. No. 9579-CB) (“Calma”).  As we discuss in this blog, companies may wish to evaluate their equity compensation plans and ascertain whether their process regarding non-employee director equity awards needs any adjustments in light of Calma.…