In August, the Securities and Exchange Commission (“SEC”) issued final rules relating to disclosure requirements for executive compensation. The rules apply to disclosure in proxy statements and other filings required by the Securities Exchange Act of 1934. In addition to extensive disclosure, the new rules require that a single total compensation figure be provided for […]

On July 20, 2006, the Department of Justice and the Securities Exchange Commission filed criminal and civil charges against former executives of Brocade Communications Systems, Inc., one of the more than eighty companies currently under investigation for backdating stock options. One of the executives charged in the Brocade litigation is the former vice president of […]

On January 27, 2006, the Securities and Exchange Commission (SEC) released proposed rules regarding the disclosure requirements for executive and director compensation in annual proxy statements filed by public companies. The proposed rules would require public companies to revamp the way in which they report executive and director compensation each year in the proxy, and […]

On September 29, 2005, Treasury and the IRS issued proposed regulations on deferred compensation under Section 409A of the Internal Revenue Code. Section 409A governs arrangements that provide deferred compensation to employees, including severance plans (referred to in the proposed regulations as “separation pay arrangements”). However, the proposed regulations exempt certain types of severance plans […]

Effective for calendar year 2005, the IRS has suspended the rules requiring companies to report amounts deferred or accrued under nonqualified deferred compensation plans on Forms W–2 and 1099–MISC. New rules under Internal Revenue Code sections 6041 and 6051 (which were enacted as part of the American Jobs Creation Act of 2004) require that companies […]

As we reported to you in our Special Alert earlier in October, proposed regulations have been published under Internal Revenue Code section 409A covering a variety of deferred compensation arrangements, including stock options, stock appreciation rights and restricted stock awards, restricted stock unit awards and other stock awards. IRS Notice 2005–1, which we summarized in […]

On October 21, 2004, President Bush signed into law the American Jobs Creation Act of 2004. The Act created a new section of the Internal Revenue Code (“Code”), Section 409A, which contains new rules regarding nonqualified deferred compensation plans. See our October 2004 Hot Topics update for more information regarding the new deferred compensation rules […]

On March 31, 2004, the Financial Accounting Standards Board (“FASB”) released its long-awaited Exposure Draft of a Proposed Statement of Financial Accounting Standards for Share-Based Payments (“Exposure Draft”). The Exposure Draft requires a charge to earnings for financial accounting purposes for stock-based compensation (and cash compensation that is based on the company’s stock price) paid […]

Recently several clients have contacted our firm asking for an explanation of the “new deferred compensation legislation.” They’ve been pleasantly surprised to learn that to date no such legislation has been enacted. However, two pieces of proposed legislation, the “National Employee Savings and Trust Equity Guarantee Act” (“NESTEG”) and the “American Jobs Creation Act of […]

The Internal Revenue Service (“IRS”) recently published new proposed regulations1 under Sections 421, 422, and 424 of the Internal Revenue Code (the “Code”) regarding statutory stock options. The new proposed regulations supplant a previous set of proposed regulations issued almost twenty years ago (on February 7, 1984, to be precise)2 and update the existing final […]