Deferred Compensation News and Updates

Deferred Compensation News brings you the latest information and insights on 409A nonqualified deferred compensation; institutional COLI, BOLI, and ICOLI; tax-and cost-efficient non-COLI funding strategies; low-cost tax managed non-COLI asset/liability designs; executive benefits benchmarking; succession planning and timely issues of executive pay and benefits. 
Featured image for “Helping You Understand Nonqualified Deferred Compensation”
March 22, 2022

Helping You Understand Nonqualified Deferred Compensation

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3 popular and quick-read reports to help you understand nonqualified deferred compensation and how it can benefit companies and employees.
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May 26, 2021

Pushback on Executive Pay: Stakeholders Taking a Stand

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According to a May 24 Reuters article, stakeholders are speaking out on executive pay, with opposition to U.S. CEO pay at its highest ever.
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April 29, 2021

Critical Updates on Executive Pay for Women in the Workplace

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Critical insights on executive pay for women.
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December 02, 2019

2020 Benchmark Policy Updates from Institutional Shareholders Services

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On November 12, Institutional Shareholder Services Inc. (ISS), announced its new policy updates for 2020. The updates, relevant to the United States and matters of executive pay, relate to the pay-for-performance model and the incorporation of Economic Value Added (EVA) metrics in the model’s secondary ‘Financial Performance Assessment’ (FPA) screen.
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October 09, 2019

Executive Pay Tied to Corporate Sustainability for Another Major Company

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Last week, The Clorox Company announced a new initiative that ties executive pay to the realization of environmental, social and governance (ESG) goals. In tying executive pay to sustainability goals The Clorox Company joins oil companies Royal Dutch Shell PLC and BP PLC, corporations that have already implemented similarly inspired executive pay or bonus structures. Laura Stein, Clorox executive vice president – general counsel and Corporate Affairs, explained, “Now more than ever, a broad spectrum of stakeholders, from investors to consumers, from customers to employees, are increasingly expecting companies to lead in driving positive environmental, social and ethical change, while ensuring they create and deliver value. Our ambitious, integrated IGNITE ESG goals aim to deliver on that aspiration through our focus on innovating for Good Growth.” In a statement to Dow Jones Newswires, Benno Dorer, chairman and CEO at Clorox, said, “As a mission-driven company, it’s important for us to continue integrating ESG into our overall business strategy.” According to CFO Magazine, the plan impacts the executive pay of the company’s 14-member Clorox Executive Committee, including CFO Kevin Jacobsen who earned nearly $2.3 million in fiscal 2019 with an incentive plan bonus of $331,650 and CEO Benno Dorer, who earned over
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June 13, 2018

Executive Pay Isn’t Always Structured for Lifetime Optimization

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“Critical information that other benchmarking reports typically cannot provide…” FOR IMMEDIATE RELEASE PONTE VEDRA BEACH, FL — (June 13, 2018) Understanding executive pay over a lifetime can be a critical differentiator as companies compete for top talent and executives evaluate their opportunities. Two benefits plans may seem very similar at the onset of employment, yet over the years, they may yield strikingly different results. Recognizing the challenges of retirement economics, Fulcrum Partners executive benefits advisory is providing CEOs and other top executives with a unique, private webpage for quickly assessing whether their pay is structured for lifetime optimization. Bruce Brownell, Fulcrum Partners Ponte Vedra Beach, said, “Top-tier executives often see their pay and benefit plan and feel confident that they know what they are earning. But over the years, how and when they receive their pay impacts how much they actually net and the security of their post-retirement cash flow.” Fulcrum Partners, one of the largest executive benefits consultancies in the U.S., has launched one-click webpages designed to make it easy for top executives from publicly held companies to view how their plans stack up against the plans of others in their comparator group. An executive’s individual webpage can be
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April 11, 2017

CEO Pay Raises are Back in Fashion Says Fortune Magazine

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CEO Pay Raises are Back in Fashion Says Fortune Magazine A March 20, 2017 article written by Geoffrey Smith, and published in Fortune Magazine, observed that attitudes about executive pay are changing. The article quoted The Wall Street Journal, stating, “CEOs at the U.S.’s biggest 100 companies got a median pay raise of 6.8 percent last year.” Additionally, as author Geoffrey Smith pointed out, such pay raises more than offset cuts these executives may have received in the previous year. Reasons cited for the improvement include: A good year in the stock market (the benchmark S&P 500 index rose 9.5 percent), and Higher dividends and buybacks for increased shareholder returns (total shareholder return at companies surveyed rose 17 percent last year, up sharply from 4.5 percent in 2015.) CEO Pay Raises Must Also Consider the Long-Term Good of the Company Although CEO pay raises are on the rise, many companies, as the article stated, are still revising their pay policies. Their objective is, “to make sure that managers put the long-term good of the company above short-term profits.” Follow this link to read the article in full in the “Leadership” section of the Fortune Magazine website. And to find out
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Featured image for “Why Does Executive Benefit Benchmarking and Strategic Planning Matter So Very Much?”
September 28, 2016

Why Does Executive Benefit Benchmarking and Strategic Planning Matter So Very Much?

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Why Does Executive Benefit Benchmarking and Strategic Planning Matter So Very Much? On the surface, two plans may appear equal. Yet, when skillful executive benefits professionals analyze the plans, disparities become glaringly obvious. Cost to the company, reward to the executive, flexibility of benefits, and tax ramifications can vary drastically. Plan sponsors typically work diligently to decrease the costs of qualified retirement plans, healthcare plans, and other welfare benefit offerings. But do you or your company apply the same level of scrutiny to your executive benefits strategies? Do you know how your plans measure up to your peer company benchmarks? What would improving earnings per share do to your stock price? Are there pennies hidden in the design, cost, or efficiency of your executive benefit plans? The Power of Looking Behind the Curtain When a company maximizes the effectiveness of its nonqualified deferred compensation strategy, it improves continuity, reduces vulnerability to talent loss, and increases earnings. Executives are positioned to achieve their personal financial goals and a meaningful partnership is built between key talent and the plan sponsor. By choosing Fulcrum Partners to review your existing benefit plan, you incur zero cost for our services and we will not tie
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May 24, 2016

CEO Tears Up His Own Executive Contract

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CEO Tears Up Executive Contract Becomes At Will Employee In a move that has drawn both praise and criticism, American Airlines CEO Doug Parker is becoming an ‘at will’ employee, tearing up his own executive contract. The move, documented by the Securities and Exchange Commission (click to view regulatory filing), means that Parker is no longer guaranteed a set level of compensation and benefits. Likewise, in the event of a change in control at American Airlines, he is not protected or covered by severance provisions. The action to void his own executive contract, giving up any ‘golden parachute’ is voluntary, and follows on Parker’s decision last May to give up the cash portion of his executive compensation and switch to being paid only in stock. Read more at: What, no parachute? Why American Airlines CEO Doug Parker is becoming an ‘at will’ employee
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April 28, 2016

Curbing Executive Pay on Wall Street

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Curbing Executive Pay on Wall Street Last week U. S. Regulators proposed new rules to address issues inherent in how Wall Street executive pay is currently handled. Under the new proposal, senior executives at the largest firms, according to the Wall Street Journal, “…would have to defer more than half their bonus pay for four years…” The regulation would impact the executive pay of potentially tens of thousands of bankers on Wall Street. In an article by Donna Borak and Andrew Ackerman (Washington) and Christina Rexrode  (New York) “… many on Wall Street say it (the new ruling) threatens to exacerbate a flight of talent from the banking sector to other fields such as hedge-fund firms and technology companies that have few limits on what they can pay employees.” The Washington Post points out that “reining in” Wall Street may not be easy. “Reining in Wall Street pay has been one of the most complicated, and controversial, parts of 2010s financial reform package approved by Congress, known as the Dodd-Frank Act. A team of regulators, including those from the Securities and Exchange Commission and the Federal Reserve, initially proposed limits to pay and bonuses given to top executives at financial
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