Earlier this month, the Treasury Department published its explanation of President Biden’s proposed fiscal 2024 budget. We have summarized the tax rate increases, as well as the executive compensation and employee benefits proposals below. These proposals, which are similar to the ones contained in President Biden’s last few budgets, are unlikely to be passed in their current form, especially now given that the House of Representatives is controlled by the GOP. However, we expect that there will be lots of negotiating over the fiscal 2024 budget, so one or more of these proposals may find their way into the final budget. We will publish updates as these proposals evolve.
Executive Compensation
Selected Issues for Boards of Directors in 2023
By Cleary Gottlieb on
We have once again asked our colleagues from around our firm to boil down the issues in their fields that boards of directors and senior management of public companies will be facing in the coming year. In the following pages, we present the results for 2023 – focused updates on 18 topics that will surely feature at the top of board agendas throughout the year.…
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Executives Could Pay for Accounting R/restatements Under New SEC Clawback Rules
Posted in Executive Compensation, SEC Guidance
On October 26, 2022, the Securities and Exchange Commission adopted final rules implementing the Dodd-Frank requirement for issuers to recover incentive-based compensation erroneously paid to current and former executive officers due to an accounting restatement.
These rules were originally proposed in July of 2015, and subsequently reopened for comment in October 2021 and June 2022.3…
Final Pay vs. Performance Rules: Teaching Old Disclosure New Tricks
On August 25, 2022 the SEC adopted final rules (the so-called “pay vs. performance” rules) that will require U.S. public companies (including smaller reporting companies (“SRCs”) but excluding emerging growth companies, foreign private issuers, and registered investment companies) to disclose information reflecting the relationship between executive compensation “actually paid” and company financial performance for the five most recently completed fiscal years (three years for SRCs).
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Diversity Issues Remain at Center Stage, and the Show Is Just Getting Started
By Francesca L. Odell & Shuangjun Wang on
Diversity, equity and inclusion (DE&I) has received unprecedented support in the past year, and trends show that it is here to stay at the forefront of focus areas for corporations and key stakeholders alike.
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Returning to the Future of Work: Considerations for the Virtual Board Room in the ‘Post’-Pandemic Era
By Jeffrey D. Karpf & Fernando A. Martinez on
Almost two years into the COVID-19 pandemic, it is clear that the corporate workplace has changed for good. As the world continues to reopen and companies return to the office, what we are returning to is not business as usual, but a new future of work – a future characterized by a shift from the traditional workplace to remote and hybrid models that provide opportunities to work in effective and efficient ways from anywhere.
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Selected Issues for Boards of Directors in 2022
By Cleary Gottlieb on
Each year, we ask colleagues from around our firm to boil down the issues in their fields that boards of directors will be facing in the coming year. In the following pages, we present the results for 2022 – focused updates on 16 topics that will feature on board agendas throughout the year.
The concerns…
New DOL Proposal on ESG Investing and Fiduciary Exercise of Shareholder Rights
On October 14, 2021, the U.S. Department of Labor (the “DOL”) issued a proposed rule (the “Proposed Rule”) clarifying whether investments made by fiduciaries of plans subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) may take into account environmental, social and governance (“ESG”) concerns in selecting investments and investment courses of action, as well as fiduciary duties in exercising shareholder rights.[1] The Proposed Rule aligns more closely with recent trends toward ESG-oriented investing and seeks to reduce any chilling effects introduced by the Trump administration’s regulatory and non-regulatory guidance on fiduciary duty-compliant ESG investing.
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Germany Changes the Legal Framework to Increase the Number of Works Councils
By Michael Brems, Falko Maurer & Amelie Wagner on
On June 18, 2021, the German Works Council Modernization Act (Betriebsrätemodernisierungsgesetz) entered into force. This legislation aims at supporting and facilitating the establishment of new works councils in Germany. In order to achieve this purpose, the new law improves, inter alia, protection against dismissal of employees who are initiating the establishment of a works council, and simplifies works council elections by expanding the possibilities for a simplified election procedure.
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ARPA to Expand 162(m) Limits on Executive Compensation
By Cleary Gottlieb on
On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (the “ARPA”), the much-debated $1.9 trillion COVID-19 stimulus legislation. The ARPA includes a provision, added by Senate amendment on March 6, 2021, which will further limit the deductibility of amounts deemed to be “excessive employee remuneration” under…