Golden parachutes get closer inspection
Article Abstract:
The leaner 1990s have seen controversy over excessive excessive compensation, and golden parachute agreements are a notable example of this controversy. These are severance arrangements which shield executives from the financial effects of a takeover of their company. Executives must normally meet certain conditions before they are protected by the parachute, most notably that their business must have undergone a change in control, and sometimes that the executive must have been fired. Some courts have questioned the legality of golden parachutes under such doctrines as business judgment.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1992
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Analysis is the answer to attacks on executive pay; defending the reasonableness of management's compensation requires a deft depiction of data
Article Abstract:
The Securities and Exchange Commission's 1992 heightened disclosure rules have led to greater scrutiny of executive compensation plans, so companies should have a defense of theirs prepared. Pay for performance is generally well received, but performance can be measured in many ways. The underlying analysis should include the company's history, business, financial success, competition, and general economic and regulatory environments. Catch-up, contingent, and multiple-incumbency compensation schemes are discussed.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1995
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Deferred-compensation plans make a comeback; retirement plan caps and higher top tax rate resurrect the use of deferred executive pay vehicles
Article Abstract:
Higher top tax rates and the limitations of qualified retirement plans are among the factors making deferred compensation for select executives more popular. To defer taxes, the delayed benefit must either be unfunded or, the less popular option, subject to a significant chance of forfeiture. Rabbi trusts have proven successful, though the risk of insolvency makes insurance an important backup. The IRS will soon announce how to handle the non- deferred Medicare portion of the Social Security tax on such income.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1995
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