Course Level:

Intermediate

Advance Preparation:

Print and review course materials

Method of Presentation:

On-demand Webcast (CLE); Group-Internet Based

Prerequisite:

General knowledge of executive compensation

Course Code:

148888

NASBA Field of Study:

Finance – Technical

NY Category of CLE Credit:

Areas of Professional Practice

Total Credits:

2.0 CLE

2.0 CPE (Not eligible for QAS (On-demand) CPE credits)

Patrick Powers, Lead Consultant
Meridian Compensation Partners, LLC

Jessica Page, Lead Consultant
Meridian Compensation Partners, LLC

Susan E. Stoffer, Partner
Nelson Mullins

Timothy P. Speiss, Co-Partner in Charge
EisnerAmper LLP

SEGMENT 1:

Patrick Powers, Lead Consultant

Meridian Compensation Partners, LLC

AND

Jessica Page, Lead Consultant

Meridian Compensation Partners, LLC

1. Annual Incentive Design for 2021: How will companies address economic impact of COVID in a short-term plan? Meridian will have a “hot off the presses” survey to provide insight on what companies are proposing in the February meeting cycle.
2. Long-Term Incentive Design for 2021: Will companies shift mix of award to emphasize time-based awards? Will companies incorporate shorter performance periods or relative goals to account for challenge in setting long-term goals? We will have data in our survey that will help provide insight on this topic, as well.
3. ESG in Incentive Plans: What questions are companies asking when they determine whether an ESG goal can be incorporated into the incentive plan? How is it measured? Over what time period is it considered? Companies are still in the planning phase for this metric. It is likely that a number of companies will “dip their toe” into this area in the next few months. As companies consider these goals, there are a number of questions that companies should be prepared to consider prior to implementation.

SEGMENT 2:

Susan E. Stoffer, Partner

Nelson Mullins

• Design Considerations for Incentive Plans – Participation, Performance, and Pitfalls
  • Participation and Top Hat Plans
  • Allocations
  • Vesting and Taxation
  • Form of Awards
  • Form and Timing of Payments
• Calling All Clawbacks
  • The SEC to finally address clawback provision of the Dodd-Frank Wall Street Act?
• Odds & Ends
  • 280G for LLCs – Watch Out for Blocker Corporations
• Proposed Changes to Rule 701 and Form S-8
• Equity Grants to “Platform” Workers

SEGMENT 3:

Timothy Speiss, Co-Partner in Charge

EisnerAmper LLP

New developments, tax planning and case for 2021

1. Summary of President-Elect Biden tax proposals bearing on executive compensation
2. Discuss alternatives to accelerate income into 2021 and potential pitfalls that employers should consider before implementing such strategies, and
3. Outline several executive compensation design choices to consider going forward.

• Rollback of top tax bracket and reinstatement of 39.6% as top marginal tax rate.
  • Increase capital gains tax rate to ordinary income tax rate for high earners.
  • Subject income over $400,000 to Social Security payroll tax.
• Increase the corporate income tax rate from 21% to 28%.
  • Impose a new corporate alternative minimum tax on corporations.
  • Employer Actions to Accelerate an Employee’s Income
  • Accelerating equity awards.

• Care should be taken to avoid impermissible acceleration of RSUs subject to the deferred compensation restrictions of IRC Section 409A.
  • Triggering FICA taxes on deferred compensation earlier, and Sec. 409A.
  • Acceleration may undermine retention goals
  • Section 409A violation could overtake possible tax savings.

• Section 162(m) grandfathered status.

• More valuable deductions if corporate tax rates increase.
• States and local municipalities taxation
• Section 16 disgorgement
• Form 4 requirements.
• Insider trading matters
• Stock ownership guidelines.
• In-Plan Roth Conversion
• Looking Forward—Design Considerations
  • Equity choice programs
  • Switch from RSUs to restricted stock awards that can be taxed at grant
  • Incentive stock options and AMT versus regular tax liability
  • Performance criteria review
  • NQDC plans that are designed to permit executives to delay payment of deferred amounts until after termination or retirement, when their tax rates may be lower, may become more attractive in the coming years

• Employee Benefits Consultants and Lawyers
• Labor and Employment Lawyers
• Human Resource Executives
• Human Resource Managers
• Executive Compensation Lawyers
• Top Level Management
• In-house Counsel