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The Impacts of Pay Ratio Disclosure Rule on CEOs and Companies

Executive Compensation CLE

The Impacts of Pay Ratio Disclosure Rule on CEOs and Companies

Live Webcast Date: Monday, September 25, 2017 at 3:00 pm - 5:00 pm (ET)
Executive CompensationRecording

On August 5, 2015, the Securities and Exchange Commission adopted the CEO Pay Ratio Disclosure Rule, which requires US public companies to properly disclose the ratio between the compensation of the company's chief executive officer (CEO) and the compensation of its median-paid employees. Mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the new rule brings heightened scrutiny of executive compensation policies. In light of this, it is imperative for companies to develop strategies in order to fulfill their responsibilities under the CEO Pay Ratio Disclosure Rule and handle the potential impact of this disclosure.

In a Webcast, a panel of distinguished professionals and thought leaders organized by The Knowledge Group will help companies understand the significant elements of the Pay Ratio Disclosure Rule. They will provide an in-depth discussion of its impact on US companies and the best strategies to meet these new disclosure requirements.

Some of the major topics that will be covered in this course are:

  • Highlights of the Pay Ratio Disclosure Rule
  • Potential Impacts on Companies
  • Key Issues to Consider
  • Best Compliance Strategies

Who Should Attend

  • Compensation and Payroll Professionals
  • Executive Compensation Practicing Lawyers
  • C-Level Executives
  • Compensation Committee Members
  • Regulatory and Policy Managers
  • Consultants
  • Business Lawyers
  • In-house Counsel

Faculty

Kenneth J. Laverriere

Kenneth J. Laverriere
Partner
Shearman & Sterling, LLP

Samantha Nussbaum

Samantha Nussbaum
Principal
FW Cook

Donald Kalfen

Donald Kalfen
Partner
Meridian Compensation Partners, LLC

Shaun Bisman

Shaun Bisman
Principal
Compensation Advisory Partners LLC

Click Here to Read Additional Material

Kenneth J. Laverriere, Partner
Shearman & Sterling, LLP 

Samantha Nussbaum, Principal
FW Cook 

Donald Kalfen, Partner
Meridian Compensation Partners, LLC

Shaun Bisman, Principal
Compensation Advisory Partners LLC

Legal Background

  • Brief recap of the rule and calculation
  • Regulatory update – CHOICE Act / SEC request for comment
  • Recent C&DIs
  • Brief overview of state and local efforts to tax high ratio companies

Implementation Issues: (What companies are encountering / what practitioners expect to be some of the main implementation issues)

  • Brief overview of progress to-date.
  • What to use for the “consistently applied compensation measure”
    • Taxable compensation / cash compensation / W-2 / other
    • What to do if using prior year payroll and if an employee on the measurement date was not employed in the prior year
  • Significant portion of workforce is part-time or independent contractors that get picked up by the rule (and what should be the look-back period prior to measurement date to determine whether or not to include them)
  • Complexities of statistical sampling
  • Multiple CEOs in one year
  • Acquisition or divestiture in Q4
  • Data privacy
  • De Minimis Exception

Governance Issues

  • What, if any, governance issues might result from pay ratio disclosure?
  • How will this impact Say-on-Pay, if at all?
  • How will this impact proxy advisors, such as ISS?
    • Included in ISS’ 2018 policy survey for the 2018 proxy season

Consequences

  • What is expected impact on the employee population or general work force?
  • Do you/clients think it would be better to have lower median employee compensation, so more relatable to the rank and file employees, or higher compensation, so the ratio looks better?  Do you think this depends on the business?  If so, what would drive the considerations here?
  • Press / PR
  • How will any union that represents the company employees perceive the ratio?
  • Challenges in interpreting the ratio
  • HR should be prepared to address potential questions from employees
    • How is pay determined relative to market
    • What are the differences in pay components at the CEO level
  • Will companies change their pay practices?
  • Will alternative disclosures help prevent negative consequences?
  • Any other material consequences?
Kenneth J. Laverriere

Kenneth J. LaverrierePartnerShearman & Sterling, LLP

Kenneth J. Laverriere is a partner in Shearman & Sterling’s Compensation, Governance & ERISA Group and has practiced at the firm for more than 30 years. He regularly speaks and writes on matters involving executive pay, governance and ERISA.

Samantha Nussbaum

Samantha NussbaumPrincipalFW Cook

Ms. Nussbaum joined the firm in 2012 and is a Principal in our Los Angeles office.  Previously she was employed as an attorney at the law firm of Skadden, Arps, Slate, Meagher & Flom, specializing in executive compensation and benefits.  She received a J.D. from Stanford Law School and a B.A. from the University of Pennsylvania where she graduated summa cum laude.  She is a member of the California State Bar.

Donald Kalfen

Donald KalfenPartnerMeridian Compensation Partners, LLC

Don is a partner at Meridian Compensation Partners and leads Meridian’s Corporate Governance and Regulatory Team.

Don has nearly 30 years of professional experience, including 20 years advising client’s on a broad range of technical, regulatory and corporate governance matters impacting the design, implementation and administration of executive compensation arrangements. These include accounting standards, tax rules, proxy disclosure requirements, securities exchange listing standards, and proxy voting guidelines of major institutional shareholders and their advisers, like ISS and Glass Lewis. Don also has assisted clients in designing a broad range of compensation arrangements including, short-term and long-term incentive plans, severance arrangements, change-in-control agreements, deferred compensation plans, and employment agreements. As head of the firm’s technical practice, Don is responsible for publishing the firm’s periodic client updates.

Don received a B.S. in accountancy from the University of Illinois (Urbana) and a J.D. (with highest honors) from IIT Chicago-Kent College of Law. He is also a Certified Public Accountant. Prior to joining Meridian/Hewitt, Don worked 15 years in the HR consulting practices of two Big-4 accounting firms and 6 years as an attorney at two major Chicago law firms.

Shaun Bisman

Shaun BismanPrincipalCompensation Advisory Partners LLC

Shaun Bisman is a principal at Compensation Advisory Partners LLC (CAP) in New York. He has 10 years of experience consulting to management and compensation committees. Shaun provides compensation consulting services to both public and privately-held companies. 

Shaun has significant experience in consumer products, financial services and insurance industries. He also authors CAP client alerts and oversees CAP’s Dodd-Frank/Say on Pay research. 

Course Level:
   Intermediate

Advance Preparation:
   Print and review course materials

Method Of Presentation:
   On-demand Webcast

Prerequisite:
   Experience in corporate law

Course Code:
   146178

NASBA Field of Study:
   Business Management & Organization - Non-Technical

NY Category of CLE Credit:
   Areas of Professional Practice

Total Credits:
   2.0 CLE

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About the Knowledge Group

The Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

About the Knowledge Group

The Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

From complex cross-border transactions to exclusively local deals, clients rely on Shearman & Sterling’s vast international network to help accomplish their business goals. The firm has approximately 850 lawyers in 20 offices around the world, and its lawyers come from some 80 countries, speak more than 60 languages and practice US, English, EU, French, German, Italian, Hong Kong, OHADA and Saudi law. They also practice Dubai International Financial Centre law and Abu Dhabi Global Market law. 

Website: http://www.shearman.com/

FW Cook provides management consulting assistance to corporations in developing compensation plans for their executives and key employees.  Formed in 1973, our firm has over 80 employees and has served over 2,700 clients from offices in New York, Chicago, Los Angeles, San Francisco, Atlanta, Houston, and Boston.  Our focus is on performance-based compensation programs (salaries, annual incentives, long-term incentives and stock ownership programs) which help companies attract and retain key employees, motivate and reward them for improved performance, and align their interests with shareowners.  Our objective is to add value to our clients' compensation programs through an independent viewpoint and distinctive capabilities.  Our strategy is to offer services in important areas where we can distinguish ourselves and build a reputation as the leading management compensation consulting firm in the United States.  The measure of our effectiveness is whether our clients take actions that result in improving their competitive position and economic vitality.

Website: http://www.fwcook.com/

Meridian Compensation Partners, LLC is one of the largest independent executive compensation consulting firms in North America. We provide trusted counsel to Boards and Management at hundreds of large public and private companies, consulting on executive compensation design issues, corporate governance matters and related disclosures. Our consultants have decades of experience in developing pay solutions that are responsive to shareholders, reflect good governance practices and align with company performance. 

Website: http://www.meridiancp.com/

CAP is an independent executive compensation consulting firm. We work with boards of directors and management teams to develop innovative and practical solutions that advance company objectives and help our clients make informed decisions about executive compensation.

Website: https://www.capartners.com/

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