Insight Type: Client Alerts
What’s Inside President Biden’s FY23 Budget Proposal – on Taxes, Share Repurchases and Executive Share Sales
Los Angeles County Court Strikes Down California Board Diversity Law
2022 Updates to Proxy Advisor Policies for Canada
Are We on the Cusp of Final Pay-vs.-Performance Disclosure Rules?
Top Money Managers Update Proxy Voting Guidelines for 2022
SEC Issues Proposed Rules on 10b5-1 Trading Plans and Share Buybacks
SEC Staff Issues Guidance on Estimation of Fair Value of Share-Based Payments
ISS Issues Final Policy Updates for 2022 and Updated FAQs on COVID-19 Related Pay Matters
Glass Lewis Issues Policy Updates for 2022
Are Finalized Clawback Rules on the Horizon?
BlackRock to Expand Proxy Voting Choice
Summary of Key Results and Expectations from the ISS 2021 Annual Policy Survey
Institutional Shareholder Services Releases its 2022 Policy Survey Questionnaire
SEC Approves Nasdaq Listing Board Diversity Rule
Say on Pay Support Improves for Oil & Gas Companies Despite a Volatile 2020
President Biden Seeks Overhaul of Non-Compete Agreements
Oil & Gas Industry Consolidation—Is Compensation a Driver, an Obstacle, or Irrelevant?
House Passes Bill to Require ESG Disclosures
Paying for ESG
Interim Say on Pay Update
SEC Will Not Enforce Rules Governing Proxy Advisory Firms
SEC Publishes Updated Regulatory Flexibility Agenda
SEC Chair Signals Potential Modification of Rules on 10b5-1 Plans
ISS Issues Guidance on Select Governance Policies
Meridian Study on Use of ESG Metrics in Incentive Plans
Compensation and HR Committees—Expanded Oversight
Gary Gensler Confirmed as SEC Chair
2021 Meridian Human Capital Management Survey
Included in $1.9 Trillion Covid-19 Relief Bill is a Modification to 162(m) of the Internal Revenue Code
COVID Impact on Incentive Compensation
LTI Grants in a Volatile Environment
Impact of COVID-19 on 2020 Annual and In-Flight Long Term Incentives
COVID-19 and Short-Term Incentive Designs
Our Meridian Client Update published May 28, 2020 discussed the impact of COVID-19 on 2020 Short-Term Incentive (STI) plans and how Committees may determine appropriate payouts (if any) at year-end. Payout decisions for 2020 STI in many instances will be impacted and driven by liquidity constraints, affordability, relative performance and/or investor expectations. The design for … Continued
Announced Pay Reductions
Meridian is currently tracking announced pay reductions within the oil and gas space. The largest number of reductions to date have been announced in the oilfield services sector. We’re planning on regularly updating this list and re-posting at https://www.meridiancp.com/insights/energy/ Oilfield Services, Equipment, and Drilling ▪ Forum Energy Technologies salary reduction 4/2 (deferred compensation suspension 6/10) … Continued
Long-Term Incentives: Before, During and After COVID-19
In response to the constantly evolving COVID-19 pandemic, companies have announced a litany of executive compensation-related actions including layoffs, furloughs, base salary reductions and much more. For long-term incentives (“LTI”), most companies have adopted a “wait and see” approach with respect to issues like: modeling implications of a V, W or U-shaped recovery; valuing existing … Continued
Stock Ownership Guidelines in Challenging Times
Stock ownership guidelines are nearly universal for both executives and directors. They help ensure alignment with shareholders by encouraging executives and outside directors to hold onto a substantial amount of company stock. They have historically not required a substantial open-market purchase of company stock. Rather, both executives and directors can typically meet their required guidelines … Continued
In-Flight Long Term Incentives—What, if Anything, Should Energy Companies be Doing?
The energy industry has some particular challenges with long-term incentives (LTI): • Multi-year equity value decline: Many energy companies entered 2020 with multiple years of underwater stock options and equity awards tracking well below their original grant date value. • New shocks to the system: COVID-19 has exacerbated the long term supply and demand imbalance … Continued
COVID-19 and Short-Term Incentives
For many companies, it is unlikely that there will be significant (if any) payouts under the executive or managerial bonus plans for 2020. Alternatively, for those that do have payouts, it is similarly unlikely that plan mechanics alone will determine final earned awards. Rather, most will have to apply some degree of discretionary adjustments in … Continued
Executive and Director Pay Reductions
Over the last several weeks, as the global economy shut down, we have seen a steady stream of U.S. companies announcing store and facility closures, reduced hours for workers, layoffs and furloughs. In addition, in response to cash preservation needs, a desire to “share the pain” and to align with the shareholder experience, a number … Continued
Director Compensation—What Public Boards are Considering in Light of Substantial Energy Price Declines and/or COVID-19
This will be the first in a series of updates that Meridian will produce, on potential impacts to executive and director compensation programs and related governance issues, from the economic turndown that has followed the COVID-19 pandemic, and the recent sharp decline in oil prices. Director Compensation Directors at many companies are currently looking at … Continued
COVID-19
First and foremost, we hope you, your families and your colleagues are staying safe and healthy during this global health crisis. We appreciate normal business operations for many companies have been upended due to the COVID-19 pandemic. Only through the extraordinary efforts of employees, executives and boards will companies be able to manage through the … Continued
New Tax Rules for Stock Options Delayed; Other Updates
As 2019 comes to a close, this alert provides updates on three fronts: ▪ The implementation date for changes to the taxation of stock options in Canada has been delayed. ▪ A new position paper on the use of non-GAAP performance measures has been released by the Canadian Coalition for Good Governance (CCGG). ▪ Proxy … Continued
UPDATE: Draft Legislation Released Changing Tax Treatment of Stock Options Effective January 1, 2020
The budget proposed to eliminate the preferential tax treatment of stock options, above an annual $200,000 face value, for large, long-established, mature firms. (See Meridian’s update here for details of the original proposal.) The highlights of the implementation language include: The new tax rules will take effect for grants made on or after January 1, … Continued
Mandatory Say on Pay Advisory Vote and Clawback Policy Disclosure Come to Canadian Companies
The newly introduced Bill to implement the federal government’s budget measures includes proposals that will, if enacted, require publicly-traded companies incorporated under the Canadian Business Corporations Act (CBCA) to: 1. Hold an annual non-binding shareholder vote on the executive compensation approach (i.e., a “Say on Pay” vote). 2. Develop an approach to compensation of directors … Continued
Economic Value Added—New Governance Considerations
ISS’s introduction of EVA metrics is likely to foster discussion among compensation committees about the nature, merit and implication of these metrics. EVA may also be of interest among institutional investors as an additional lens to assess pay and performance alignment. This Client Update provides an overview of EVA, how ISS intends to use it … Continued
2019 Federal Budget: Changes to Tax Treatment of Stock Options
The government has proposed to limit the preferred tax treatment for stock options. Currently options are eligible for a deduction the effect of which is to tax them at one-half the ordinary income tax rate (similar to capital gains treatment). There are two proposed exemptions to this change: 1. The proposed rule will only affect … Continued
House Committee Approves Bill to Repeal Key Provisions of Dodd-Frank
The principal focus of the CHOICE Act is the banking provisions of Dodd-Frank and the Consumer Financial Protection Bureau. In addition, the CHOICE Act includes provisions relating to agency rulemaking requirements, judicial review of agency actions and capital formation. In the context of executive compensation and corporate governance, if ultimately approved by Congress, the CHOICE … Continued
Holding Steady with Say on Pay
In contrast to the mandatory (but non-binding) advisory votes on executive compensation (“Say on Pay” votes) in the U.S., Say on Pay remains voluntary in Canada. Close to 80% of the S&P/TSX 60 companies have a Say on Pay vote – a level that has remained fairly stable for the last few years. The S&P/TSX … Continued
Treasury, Cash Settled and Market Purchase Share Unit Plans
The structure of a share unit plan and how a share unit is settled can have a significant impact on its taxation and accounting treatment. This update: Considers three alternative share unit plans that are generally used in Canada and outlines the key advantages and disadvantages of each alternative Summarizes the proposed changes to the … Continued