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Drafting a Modern Equity Incentive Plan

With the 2020 proxy season approaching, many public companies are readying new or amended equity plans for shareholder approval.

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These plans are a ubiquitous feature of public companies’ compensation programs. They allow companies to grant various types of equity and equity-based awards to their non- employee directors, executives and other key employees. Although equity plans are broadly similar, companies…

Fostering Diversity in Board Pay Practices, Part Two

In this two-part series, we examine the current state of board compensation and whether it accommodates evolving governance practices.

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In recent years, we have observed a remarkable level of homogenization of compensation practices for non-employee directors, even as what is expected from board members of public companies continues to evolve and—generally speaking—expand. In our client work, we have also…

The “Trump Trade”: Will Stock Options Make a Comeback?

Read this interview with Meridian Partner Bob Romancheck from Corporate Board Member magazine.

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This interview originally appeared in Corporate Board Member magazine. Corporate Board Member spoke to Bob Romanchek, partner and consultant with Meridian Compensation Partners, about the expected use of stock options going forward. At one time, the use of stock options…

Extending the Life of Your Share Pool

Inducement grants are a way to attract talent without burning the share pool.

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Imagine your organization is just about to hire a new CEO from outside the company. The prospective CEO’s compensation offer includes a large grant of equity incentives. This grant includes two years’ worth of normal annual cycle grants and a…

Are Your Retirement Vesting Provisions Motivating the Wrong Behaviors?

Analyzing retirement vesting provisions and ensuring they incentivize the right behaviors.

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As more executives near retirement age, many banks are realizing their equity vesting provisions may be motivating unintended behaviors. Do your bank’s retirement provisions encourage executives to: Provide advance notice of retirement to facilitate planned succession? Assist in their transition?…

Updates to ISS & Glass Lewis Compensation & Related Policies

Policy changes have implications for both equity plan voting and director over-boarding.

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ISS has changed its methodology for assessing treasury-based incentive plans with effect in 2016. In addition, both ISS and Glass Lewis have changed their standards for director “over-boarding” with effect in 2017. Equity Plan Voting As expected, ISS is introducing…

Modest Year over Year Increases in Canadian Director Pay

Even with this increase, Canadian directors are still paid less than their American counterparts on average.

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Director total compensation increased year over year, while equity held steady at just under one-half of director pay. This aligns with increases in director time commitments and expansion of the role of board members. Directors of Canadian companies continue to…

What’s New for Change-in-Control Agreements

In the banking industry, where mergers and acquisitions are common occurrences, change-in-control (CIC) arrangements can be a critical part of executive compensation programs

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In the banking industry, where mergers and acquisitions are common occurrences, change-in-control (CIC) arrangements can be a critical part of executive compensation programs. However, these arrangements are currently under scrutiny from shareholders, institutional investors, the media and most notably, proxy…

Two Lawsuits Brought Over Alleged Excessive Director Compensation

Two recent lawsuits represent an emerging trend of shareholder plaintiffs raising allegations that directors’ pay is excessive and that the equity plan in which they participate does not set forth meaningful limits on their compensation.

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In early June 2014, a derivative action was filed in Delaware Chancery Court against executive officers and directors of Facebook, including Mark Zuckerberg, alleging that the social media company’s equity plan in which its employees, executives and directors participate, allows…

Responding to Pressure

How Regulators are Changing Bank Incentive Pay

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The Federal Reserve’s influence on incentive practices at the largest banks is cascading to regional banks. Although the final Dodd-Frank Act regulations have not been released, many banks are adjusting their incentive programs to respond to regulatory pressure. A Meridian…

Balancing Act

Back-and-Forth Over Pay Leads to Small Gains, Changing Incentives

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Bank chief executives had a good but not a great year in 2013, based on an analysis of the pay packages at 35 U.S. banks with assets of $20 billion to $400 billion. Total compensation — including base salaries, incentives…