Executive Compensation

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.

Continue Reading Selected Issues for Boards of Directors in 2023

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

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).
Continue Reading Final Pay vs. Performance Rules: Teaching Old Disclosure New Tricks

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.
Continue Reading Diversity Issues Remain at Center Stage, and the Show Is Just Getting Started

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.
Continue Reading Returning to the Future of Work: Considerations for the Virtual Board Room in the ‘Post’-Pandemic Era

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.
Continue Reading New DOL Proposal on ESG Investing and Fiduciary Exercise of Shareholder Rights

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.
Continue Reading Germany Changes the Legal Framework to Increase the Number of Works Councils

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

On Wednesday, March 10, after engaging in conversations with stakeholders, the U.S. Department of Labor’s Employee Benefits Security Administration issued an enforcement policy statement in which it declined to enforce two DOL rules put in place by the Trump administration in 2020.

The first of these rules placed limitations on the ability of plans subject to ERISA to invest in environmental, social and governance (“ESG”) funds. In particular, it provided that a fiduciary’s duty of loyalty and prudence under ERISA would only be satisfied if investments were selected solely on the basis of pecuniary factors (defined as factors that have a material effect on the risk and return of an investment), and that ESG factors could only be considered to the extent they created economic risks or opportunities that qualified investment professionals would treat as material economic considerations under generally accepted investment theories. The ESG rule, which many regarded as making ERISA plan investments in ESG-oriented funds prohibitively difficult, received overwhelmingly negative comments from both financial institutions and the public at large. This latest development is not surprising, as the Biden administration had previously signaled that it would be reexamining this rule.
Continue Reading DOL Declines to Enforce Trump Administration Rules on ERISA Plan Investments, Proxy Voting