What You Need to Know (And Haven’t Been Told) about Perks, SERPs, Severance,  Deferred Compensation, 162(m) and More

1. Deferred Compensation
2. SERPs
3. Perks
4. Severance
5. Stock Options
6. Restricted Stock/Restricted Stock Units
7. 162(m) Compliance and Disclosure

1. DEFERRED COMPENSATION

   Practice Pointers from the Task Force - Deferred Compensation

   • Cost of Deferred Compensation
     —Yale Tauber and Donald Levy
   • The Hidden Costs of SERPs & Deferred Compensation Arrangements - And What to Do About It!
     —Diane Doubleday, Mercer Human Resources Consulting
   • Disclosure of Above-Market Interest Paid to CEOs in Recent Proxy Statements
     —Tim Ranzetta, Equilar
   • Chart on Impact of Proposed Nonqualified Deferred Compensation Legislation: Analysis of Common Situations
     —Max Schwartz, Sullivan & Cromwell
   • IRS Targeting Non-Qualified Compensation, Stock-Based Compensation, 162(m) Issues and Perks
     —Broc Romanek, TheCorporateCounsel.net
   • Stealth Compensation - Retirement Benefits
     —Lucian Bebchuk and Jesse Fried
   • Stealth Compensation - Post-Retirement Plans and Consulting Contracts
     —Lucian Bebchuk and Jesse Fried

   Media Articles - Deferred Compensation [Member/Media/07a-inc.htm]

   Firm Memos - Deferred Compensation

   • "Executive Retirement Benefits," Mercer Human Consulting (9/04)
   • "Regulatory Update," Frederic W. Cook & Co. (8/12/04)
   • "Executive Benefits: The Latest Governance Issue," Mercer Human Resource Consulting (7/1/04)
   • "Proposed Legislation Regulating Nonqualified Deferred Compensation Plans," Fried Frank Harris Shriver & Jacobson (7/9/04)
   • "Provisions Affecting Deferred Compensation in the American JOBS Creation Act of 2004," Frederic W. Cook & Co. (6/28/04)
   • "Senate Passes Bill Rewriting Rules of Nonqualified Deferred Compensation," Palmer & Dodge (5/24/04)
   • "Deferred Compensation Legislation," Covington & Burling (4/19/04)

   

2. SERPs

   Practice Pointers from the Task Force - SERPs

   Media Articles - SERPs [Member/Media/07b-inc.htm]

   Firm Memos - SERPs

   • "Executive Retirement Benefits," Mercer Human Consulting (9/04)
   • "What's Next In Corporate Pay Practices?", Anita Dennis, Journal of Accountancy (7/04)

   

3. PERKS

   Practice Pointers from the Task Force - Perks

   • IRS Targeting Non-Qualified Compensation, Stock-Based Compensation, 162(m) Issues and Perks
     —Broc Romanek, TheCorporateCounsel.net
   • Use of Corporate Aircraft and the Method for Determining Value Attributed to That Use
     —Beverly Aisenbrey, Frederic W. Cook & Co.

   Studies - Perks

   • "Obama Lays Out Limits on Executive Pay," Jonathan Weisman and Joann S. Lublin, Wall Street Journal (2/5/09)
   • "In Curbing Pay, Obama Seeks to Alter Corporate Culture," Stephen Labaton and Vikas Bajaj, N.Y. Times (2/4/08)
   • “Loopholes Sap Potency of Pay Limits," Mark Maremont and Joann S. Lublin, Wall Street Journal (2/6/09)
   • "Perquisite Disclosures Under Fire," McGuire Woods (5/6/05)
   • "Important Lessons from the SEC Enforcement Action Against Tyson Foods Regarding Disclosure of Perquisites" Preston Gates Ellis (5/4/05)
   • "Executive Compensation - Perquisites," Wachtell Lipton Rosen & Katz (5/2/05)
   • "Plane Perks," David Cay Johnston, NY Times Reporter
   • Report of Investigation by the Special Committee of the Board of Directors of Hollinger International Inc. (9/30/04)
   • "Flights of Fancy: Corporate Jets, CEO Perqusities and Inferior Shareholder Return"  David Yermack (March 2005) (finding that companies that allowed corporate jet use for personal travel underperform the rest of the market)
   • "Personal Use of Employer-Provided Aircraft," NBAA (3/02)

   Media Articles - Perks [Member/Media/07c-inc.htm]

   

4. SEVERANCE

   Practice Pointers from the Task Force - Severance

   Media Articles - Severance [Member/Media/07d-inc.htm]

   Firm Memos - Severance

   • "Change of Control Employment Arrangement—What Directors are Asking for Today," Wachtell Lipton Rosen & Katz (6/10/04)
   
5. STOCK OPTIONS

   Practice Pointers from the Task Force - Stock Options

   Media Articles - Stock Options [Member/Media/07e-inc.htm]

   Firm Memos - Stock Options

   • "Novel Ways to Structure Pay Packages" - Joe Bartlett, Fish & Richardson LLP (6/23/04)
   • "Stock Plan Design" - Wachtell, Lipton, Rosen & Katz (1/21/04)
   • "Changing Equity Compensation Rules – Is Your Company Ready?" - Palmer & Dodge (10/9/03)
   • "Stock Ownership Policies" - Frederic W. Cook & Co. (9/23/03)
   • "Restricted Stock or Options? Rethinking Equity Incentive Plans" - Gallagher, Callahan & Gartrell (9/03)
   • "Long-Term and Stock-Based Grant Practices for Executives" - Frederic W. Cook & Co. (9/03)
   • "The Changing Face of Equity Compensation" - Cooley Godward (8/6/03) (option expensing)
   • "Practical Advice Regarding Different Forms of Equity Stock" - Wachtell, Lipton, Rosen & Katz (4/23/03)
   • "Reconsidering Long-Term Incentive Vehicles" - FPL Associates
   • "Option Expensing Update: FASB’s Preliminary Decisions and Strategies for Cost Mitigation" - Mellon Human Resources & Investor Solutions

   

6. RESTRICTED STOCK/RESTRICTED STOCK UNITS

   Practice Pointers from the Task Force - Restricted Stock/Restricted Stock Units

   Media Articles - Restricted Stock [Member/Media/07f-inc.htm]

   Firm Memos - Restricted Stock/Restricted Stock Units

   • "Restricted Stock or Options? Rethinking Equity Incentive Plans" - Gallagher, Callahan & Gartrell (9/03)
   • "Compensating Employees with Restricted Stock – Should You Follow Microsoft’s Lead?" - Morgan Miller Blair (8/12/03)
   • "Goodbye Stock Options, Hello Restricted Stock – Microsoft Leads the Way" - Graham & Dunn (8/7/03)

7. 162(m) Compliance and Disclosure

   Practice Pointers from the Task Force - 162(m)

   • Inadvertent Section 162(m) Violations
     —Tim Sparks, Compensia
   • Towards Better Drafting of Section 162(m) Disclosures
     —Broc Romanek, TheCorporateCounsel.net
   • IRS Cracks Down on Corporate Deductions Taken for Executive Compensation in Excess of $1 Million
     —Karen Krueger and Jeremy Goldstein are Partners of Wachtell, Lipton, Rosen & Katz LLP
   • IRS Targeting Non-Qualified Compensation, Stock-Based Compensation, 162(m) Issues and Perks
     —Broc Romanek, TheCorporateCounsel.net
   • Consider Designating a 162(m) Compliance Person
     —Anonymous Task Force Member
   • Section 162(m) Compliance Checklist
     —Tim Sparks, Compensia
   • Common Section 162(m) Violations
     —Tim Sparks, Compensia
   • How to Avoid Exceeding the Section 162(m) Million Dollar Cap
     —Bruce Shnider, Dorsey & Whitney LLP
   • IRS Expresses Concern over "Schemes" Improperly Limiting Qualified Retirement Plan Benefits to Highly Compensated Employees
     —Lucile Anutta, McGuireWoods LLP

   Media Articles - 162(m) Compliance and Disclosure [Member/Media/07g-inc.htm]