News & Analysis as of

Equity Compensation

Four Considerations For Advisor Option Grants

by Fox Rothschild LLP on

Startup clients often rely on independent contractors and advisors during their early stages but do not have the cash to pay them, so they turn to equity compensation. Stock options are a great incentive tool, but founders...more

A Reminder to Track Rule 701 Equity Awards to U.S. Residents

by Dorsey & Whitney LLP on

Canadian companies relying on Rule 701 under the Securities Act of 1933 to exempt their U.S. awards of stock options and other types of compensatory equity (such as RSUs and PSUs), need to track on an ongoing basis the amount...more

Common U.S. Securities Problems with Canadian Stock-Based Compensation Plans

by Dorsey & Whitney LLP on

We are frequently asked to review Canadian companies’ stock option, restricted share unit (RSU), performance share unit (PSU), deferred share unit (DSU), and other stock-based compensation plans for U.S. securities law...more

SEC Enforcement Action Shines Light on Equity-Based Compensation Disclosure Compliance of Private Companies

by White and Williams LLP on

On March 12, 2018, the US Securities and Exchange Commission (SEC) brought an action against Credit Karma, Inc., a Silicon Valley-based fintech company, for issuing stock options to its employees in violation of US securities...more

Tax Reform: Compensation and Benefits

by Burns & Levinson LLP on

The new federal tax reform, signed into law by President Trump on December 22, 2017, will change tax liabilities and strategies for many organizations and individuals beginning this year. The following is a summary of key...more

Tax Act: New Opportunity to Defer Income from Certain Private Company Equity Grants

by WilmerHale on

The new Section 83(i) of the tax code, enacted as part of the Tax Act, allows certain private company employees to elect to defer, solely for income tax purposes and for a period of up to five years, the income attributable...more

Dear Littler: Does Equity Compensation Count as Wages under Federal and California Law?

by Littler on

Dear Littler: We need to hire some key personnel for our new tech company. We intend to offer them equity in the enterprise as compensation. The equity should be very valuable in the long run, and the deal we have in mind is...more

Discretionary Equity Awards to Directors Subject to “Entire Fairness” Standard of Review

by Dorsey & Whitney LLP on

Human nature being what it is, the law, in its wisdom, does not presume that directors will be competent judges of the fair treatment of their company where fairness must be at their own personal expense. According to the...more

Employee profit participation plans

by DLA Piper on

One of the primary goals of the current Belgian Federal Government is to reduce the salary costs of employees in Belgium. To achieve this goal, the Government aims at introducing a legal framework for cost-effective employee...more

Delaware Supreme Court Limits Stockholder Ratification Defense for Director Compensation Decisions

by Shearman & Sterling LLP on

Last week, the Delaware Supreme Court, in In re Investors Bancorp, Inc. Stockholder Litigation (“Bancorp”), reversed the Delaware Court of Chancery and held that awards granted to directors under a stockholder-approved equity...more

Congress Approves Tax Reform Bill Impacting Equity Compensation

by Fenwick & West LLP on

The Tax Cuts and Jobs Act was passed by both chambers of Congress on Wednesday, December 20, 2017, and will be sent to the President’s desk for final signature. The Fenwick & West team will provide a more detailed analysis in...more

Delaware Supreme Court Increases Risk for Boards in Making Discretionary Director Compensation Awards

by Goodwin on

On December 13, 2017, the Delaware Supreme Court issued a decision in In re Investors Bancorp, Inc. Stockholder Litigation, holding that director compensation awards made pursuant to an equity compensation plan that permits a...more

Reversing A Dismissal, Delaware Supreme Court Declines To Apply Ratification Defense For Discretionary Compensation Awards Under...

by Shearman & Sterling LLP on

On December 13, 2017, the Delaware Supreme Court reversed the Court of Chancery’s dismissal of fiduciary duty breach claims brought derivatively by stockholders of Investors Bancorp, Inc. against its directors in connection...more

Director Discretionary Compensation Awards Tested by Entire Fairness Standard According to Delaware Supreme Court

The Delaware Supreme Court found in In re Investors Bancorp Stockholders Litigation that director equity grants based on director discretion are subject to an entire fairness standard of review. ...more

Equity Compensation Rules Continue to Change in Latest Proposed Tax Reform Bill

by Fenwick & West LLP on

The tax reform bill passed by the Senate early Saturday morning, December 2, in a 51-49 vote contained a number of last-minute amendments which, among other things, continue to leave key equity compensation rules in flux....more

Legislative developments: Tech sector dodges blow and picks up limited win under tax reform bills—for now

by Dentons on

Technology sector startups and other emerging growth companies that typically rely on equity compensation to attract talent should be relieved—for now—by the Tax Cuts and Jobs Act bill (HR 1) passed by the House on November...more

2017 End of Year Plan Sponsor “To Do” List (Part 3) Executive Compensation

by Snell & Wilmer on

As 2017 comes to an end, we are happy to present our traditional End of Year Plan Sponsor “To Do” Lists. This year, we are publishing our “To Do” Lists in four separate Employee Benefits Updates. Part 1 covered year-end...more

New SEC Guidance on Safeguards to Protect Information Delivered to Holders of Securities Issued under Compensation Plans

On Nov. 6, 2017, the Securities and Exchange Commission (the “SEC”) provided guidance on the use of safeguards to protect financial statements and other sensitive information delivered to holders of securities issued under...more

Tax Cuts and Jobs Act

On November 2, 2017, the Committee on Ways and Means of the U.S. House of Representatives released its tax reform bill titled the Tax Cuts and Jobs Act (the “House Bill”). On November 6, 2017, Kevin Brady, Chairman of the...more

The Republican Tax Plan and the Revenue-Raising Assault on Employee Compensation

by Shearman & Sterling LLP on

On November 2, 2017, the Republican caucus of the House of Representatives unveiled its plan to overhaul the nation’s tax code. In an apparent effort to raise revenue, the “Tax Cuts and Jobs Act,” if adopted, would...more

Tax Cuts and Jobs Act Proposes Sweeping Changes in Compensation and Benefit Taxation

On November 2, 2017, Congressman Kevin Brady of Texas, Chairman of the House Ways and Means Committee, introduced the Tax Cuts and Jobs Act (the "Proposed Bill") in the U.S. House of Representatives. The Proposed Bill...more

Executive Compensation Ramifications of Proposed Tax Cuts and Jobs Act

by Latham & Watkins LLP on

In its current form, the proposed legislation would drastically change the tax treatment of executive compensation in several areas. The Tax Cuts and Jobs Act, as proposed by the Ways and Means Committee of the US House of...more

I-18- DC Update on Joint Employer and OT Issues, and Part 1 of an Expert Interview on Pay Equity Audits

by Cozen O'Connor on

This episode of Employment Law Now provides an update on current DC initiatives to change joint employer and overtime exemption standards, as well as Part 1 of a two-part interview with a leading expert on conducting an...more

Reminder: Equity Compensation May Require HSR Filings For Executives Of REITs Or Other Companies

by Goodwin on

Common equity-based compensation-related transactions, such as restricted stock grants, settlement of restricted stock units (RSUs), exchange of operating partnership units (OP units) and option exercises, may trigger filing...more

Common U.S. Tax Withholding and Reporting Errors with Respect to Certain RSUs

by Dorsey & Whitney LLP on

A Canadian company (the employer) historically has not issued equity-based awards to employees of its U.S. subsidiaries, but it now is considering doing so. Past posts have addressed potential U.S. income tax pitfalls and the...more

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