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L-Blast | October 2011

Say on Pay Rules Don’t Help Boards Manage Executive Compensation

by Michael Cohn,

The “say-on-pay” disclosure provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act will not help the boards of public companies better manage executive compensation, according to a new survey by accounting and consulting firm BDO USA. The Survey of 101 corporate board members at public companies found that 78 percent of them said they did not believe Dodd-Frank’s “say-on-pay” disclosure rules would them better manage the compensation of their key executives. Only 22 percent described the rules as helpful.

Federal Judge Gives Shareholders Green Light for Say-on-Pay Suit

by Alison Frankel, Thomson Reuters

One of the verdant new fields the Dodd-Frank Act has opened for litigators involves the Securities and Exchange Commission’s Say-on-Pay rule, which requires public companies to put executive compensation up for an advisory shareholder vote every two years. The rule went into effect in January. By May, Dena Aubin of Reuters was already reporting on a surge in shareholder derivative suits claiming boards breached their fiduciary duty by pushing through pay packages that shareholders voted down.

Belts & Suspenders: Compensation Committee Best Practices

by Brent Longnecker, Chris Crawford, & Greg Whittaker

Compensation lawsuits, the Dodd-Frank Act, Say-on-Pay, the media, the IRS looking for more revenue, and “Occupy Wall Street” all have executive compensation at the forefront of a fevered pitch in corporate America. Longnecker & Associates is possibly only firm in the country that has its CEO on public company boards, serve as an expert witness in the courtroom, advise compensation committees as a consultant, have written 14 books and over 400 articles on pay, build and teach the curriculum around pay, and own their own business. As such, we are positioned well to help companies avoid the landmines in today’s complex compensation and governance environment. While not completely comprehensive, the following are several best practices a compensation committee may consider to start navigating the landmines of the current environment.

New Report Details What the IRS Permits and Consequences of Failing to Follow the Rules

by GuideStar

GuideStar — the leading source of nonprofit information — has released a new report, “What You Need to Know about Nonprofit Executive Compensation,” detailing the regulations governing executive compensation. The report, which can be dowloaded for FREE, reviews how nonprofit professionals and board members can maintain public trust and mitigate risk through their compensation packages.

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