P. Garth Gartrell, Author at The Croner Company

When ISS Will Recommend a No Vote on a Director for Compensation Related Matters

Posted on Jan 30, 2014 by in Compensation Committee Fiduciary Concerns, Recent Developments

Recently, Institutional Shareholder Services (“ISS”) issued its 2014 US Summary Guidelines (http://www.issgovernance.com/files/ISS2014USSummaryGuidelines.pdf). ISS expounded upon a few themes, one of which is especially worth considering as the calendar roles into the 2014 proxy season… ISS Compensation ISS indicates it will recommend a vote “against” or withhold from the members of the Compensation Committee and potentially […]

Continue Reading →

409A Aspects of Equity Compensation

Posted on Dec 5, 2012 by in Compensation Solutions, Equity Compensation

Private Equity Salary Q. 25. Are stock options subject to 409A? Generally not, though there is one clear area of concern. If an option is granted at a discount (i.e., the option exercise price is less than the fair market value of the underlying stock at the time of grant), the option will be subject […]

Continue Reading →

Nasdaq Proposed Listing Standards Regarding Compensation Committees – Detailed Discussion

Posted on Oct 9, 2012 by in Compensation Committee Fiduciary Concerns, Recent Developments

SEC Directive to Stock Exchanges New SEC Rule 10C-1 directs the national stock exchanges and associations (“FINRA”) to adopt rules requiring listed companies to comply with rules regarding the following: Independence of compensation committee members,[1] Compensation committee authority to retain consultants, independent legal counsel and other compensation advisers at company expense,[2] and Compensation committee consideration […]

Continue Reading →

Nasdaq Releases Proposed Rules on Compensation Committee Independence

Posted on Sep 28, 2012 by in Compensation Committee Fiduciary Concerns, Recent Developments

[Our detailed discussion of the Nasdaq roposed changes, and the SEC directive to the exchanges can be found at: http://bit.ly/PmaAz2. The NasdaqProposed Rule can be found at: http://bit.ly/Qeb6LD] As we reported a few days ago, on Tuesday NYSE issued its proposed changes regarding compensation committee independence. On Wednesday, Nasdaq also amended its rules. The Nasdaq […]

Continue Reading →

New York Stock Exchange Releases Proposed Rules on Compensation Committee Independence

Posted on Sep 26, 2012 by in Recent Developments

When Congress passed its Dodd Frank legislation in 2010 it directed the Securities and Exchange Commission to require US stock exchanges to adopt rules for independence of board members who sit on compensation committees of US public companies.  The SEC finalized its instructions to the exchanges in the summer of 2012 and the New York […]

Continue Reading →

SEC Compensation Committee Independence Rules

Posted on Jun 25, 2012 by in Compensation Committee Fiduciary Concerns

On June 21, 2012, the SEC finalized its rules on board compensation committee independence. As a practical matter, for most companies the rules do not change much, primarily because existing tax (IRC Section 162(m) and securities law (Rule 16b-3) already effectively require that compensation committees meet fairly rigorous independent standards) Moreover, the new rules will […]

Continue Reading →

DIRECTOR COMPENSATION COMMITTEE FIDUCIARY CONCERNS—OVERVIEW OF SHAREHOLDER LITIGATION

Posted on May 9, 2012 by in Compensation Committee Fiduciary Concerns

Overview of shareholder litigation A big concern of any director, and by association, any adviser to a director, is the threat of a shareholder lawsuit. Executive compensation lawsuits have met with only limited success over the years in large part because of the difficulty of satisfying the various procedural requirements to file the typical kind […]

Continue Reading →

DIRECTOR COMPENSATION COMMITTEE FIDUCIARY CONCERNS—BACKGROUND

Posted on May 1, 2012 by in Compensation Committee Fiduciary Concerns

In the early 80s there was a great hue and cry that executives with large change of control packages were enriching themselves by forcing company sales on non-attendant shareholders, particularly on companies with publicly traded stock. This resulted in the golden parachute rules of Internal Revenue Code (“IRC”) Section 280G. For the next twenty years […]

Continue Reading →