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Managing the Modern Workplace
V&E International Labor & Employment Resources

Pay Ratio Implementation: Recent Guidance and Practical Steps

The 2018 proxy season will be the first time many companies are required to comply with the SEC’s pay ratio disclosure rule, which was adopted by the Commission in 2015 pursuant to the Dodd-Frank Act. The pay ratio disclosure rule requires companies to disclose the annual total compensation of the median employee, the CEO, and the ratio of those two amounts, as well as certain estimates and assumptions used in determining the median employee and calculating annual total compensation.

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Hold Them or Fold Them — What to Do with a CEO in the Midst of Controversy

I sometimes wonder why anyone would want to be a CEO of a public company in today’s climate. Gone are the days when CEOs were venerated members of the community. Today’s CEO is much more likely to be facing off with aggressive shareholder activists, a critical public or an unfriendly media on the hunt for an adversarial story. Unfortunately for the companies that employ them, some of the attacks on CEOs are justified because of their behaviors or decisions. When its CEO is embroiled in a scandal or simply accused of mismanagement, what should a company do? When should a company hold onto its CEO, and when should it fold, and hope to be dealt a better hand the next time?

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Time to Review Nonsolicitation Covenants

I’ve found that it’s fairly common for Texas employers to have questions about the enforceability of a non-compete, but not so common for them to ask about the enforceability of their non-solicitation agreements. Yet, I often find myself in a courtroom relying on those non-solicits to try to get a departed employee to stop contacting a client’s customers or employees.

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Under Siege: Addressing the CEO Attacked by Shareholder Activists

CEOs have long had to look over their shoulders to their company’s shareholders with some fear of a revolt that could lead to the CEO’s removal. While typically seeking board representation, shareholder activists also often go after the CEO of their targets. It is the unfortunate circumstance that sometimes a board has to sacrifice the CEO to satisfy the activist.

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Human Resources New Year’s Resolutions for the Donald, Ivanka, Andrew, and Carl Era

If you’re an HR manager, director, or vice president, you’ve probably not only got a pretty long holiday wish list, but also a fairly sizable list of New Year’s resolutions. It probably includes some of those pesky tasks that build up over the year—reorganizing and digitizing personnel files, compiling information for performance reviews, reviewing and updating software for third-party payroll platforms, and the like. Your to-do list probably also includes some new things, like preparing IRS filings under the Affordable Care Act for plan-year 2016 (due in March 2017).

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IRS Confirms that Partners Are Not Employees

The Internal Revenue Service recently issued guidance confirming its position that an individual cannot be treated as both an employee and a partner of the same entity (sometimes referred to as the “dual status” position). This guidance clarifies that employees of partnerships and certain limited liability companies (and, in some cases, their subsidiaries) who receive equity interests in their employer cease to be treated as employees for tax and benefit plan purposes, regardless of how small of an interest they receive and whether or not they have any management responsibility. This news often comes as an unwelcome surprise to employees, as well as to employers structured as partnerships and LLCs that grant equity-based compensation awards to attract and retain key employees. 

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Contributors

Thomas H. Wilson

Thomas H. Wilson Partner

Christopher V. Bacon

Christopher V. Bacon Counsel

Sean Becker

Sean Becker Partner

Stephen M. Jacobson

Stephen M. Jacobson Partner

Martin C. Luff

Martin Luff Counsel

Lawrence S. Elbaum Partner

S. Grace Ho

S. Grace Ho Counsel

Jacob D. Ecker

Jacob D. Ecker Associate

Robert Sheppard

Robert Sheppard Associate