L-Blast | March 2019
It’s hard to believe the first quarter of the year is gone and Spring is here! We are at the peak of proxy season and we have some great articles to share with you this month. We hope these will shed some new light on executive compensation trends and the effects tax reform is having across all industries.
The first piece is from our partners at NFP and focuses on SERPs. As explained in the article, supplemental executive retirement plans (SERP) can hold the key to solving government limits and compensation caps while still attracting, motivating and retaining key talent. This holds true particularly for tax-exempt organizations who now face an excise tax on compensation exceeding $1M as outlined in the Tax Cuts and Jobs Act.
The second article highlights the impacts tax reform has had on pay practices and shares key considerations for the 2019 proxy season as well as emerging trends and best practices in executive and director compensation.
The third article shares thoughts on how executive compensation in the banking industry should be reformed and recommends a focus on long-term shareholder value through incentive compensation consisting only of restricted equity.
Lastly, just a reminder for those in the energy sector – our midstream and upstream surveys will be launching April 1st, don’t miss out! We are always here to help, especially now during proxy season, don’t hesitate to reach out to us for assistance with your pay ratio disclosures and CD&A. We appreciate each and every one of you and as always, let us know if there is a particular subject you’d like to learn more about.
Brent Longnecker and the NFPCCmp;A Team
Chairman and CEO
Longnecker & Associates
SERPs — One Size Does Not Fit All
Employers have long struggled with the ability to attract, retain and reward key talent. Government limits and restrictions on the amount that employees and employers may contribute toward qualified retirement plans, such as IRAs and 401(k) and 403(b) plans, leave many highly compensated executives – usually key executives – without enough retirement income to sustain their current standard of living.
Thoughts on How Bank Executive Compensation Should Be Reformed
Senior bank regulators are considering new regulations on bank executive pay. Bank regulators and boards should consider three criteria to evaluate bank executive compensation reform policies: simplicity, transparency, and a focus on creating and sustaining long-term shareholder value. As shareholders are now required to vote on CEO compensation packages, a simple incentive structure is easier for them to understand and evaluate, reducing the need to rely on third-party vendors of proxy voting advice, the value of which has been the subject of considerable controversy.
Contact Us for Help with Your Proxy Statement and CD&A
The deadline to disclose the CEO Pay Ratio in proxy statements is quickly approaching and NFPCCmp;A is here to help. Our internal experts have evaluated the rule, and understand the various alternatives available. Additionally, we are here to assist in developing your CD&A disclosures and can advise on what areas you should concentrate on when putting together your statement.
GET THE MOST OUT OF YOUR 2019 PROXY STATEMENT & SHAREHOLDER OUTREACH ENGAGEMENTS.
281.378.1350 GET HELP NOW
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