December 17, 2018

Transcript: “Shareholder Proposals – Corp Fin Speaks”

Due to popular demand, we have posted the transcript for last week’s webcast – “Shareholder Proposals: Corp Fin Speaks” – featuring Corp Fin’s Matt McNair in record time…

Pay Ratio: Letter from Investor Group to Fortune 500

Here’s news from this ’Willis Towers Watson’ blog:

Companies preparing for Year 2 CEO pay ratio disclosures now have more questions to consider. Recently, Fortune 500 company compensation committees began receiving a letter from a group of 48 institutional investors requesting them to disclose more information on workforce compensation practices.

The letter posits that since “disclosure of the median employee’s pay provides a reference point for understanding the company’s workforce,” companies should move “to help investors put this pay information into the context of your company’s overall approach to human capital management” with more expansive disclosure.

IRS Issues Section 83(i) Guidance

A few days ago, over on, I blogged about new Section 83(i) of the Internal Revenue Code – it allows private company employees to defer taxes for up to five years from the exercise of a stock option or settlement of a RSU. Recently, the Treasury Department & IRS issued this notice about this new provision. This memo from Davis Polk outlines the key takeaways (we’re posting memos in our “Restricted Stock” Practice Area on

– The measurement period to determine whether the employer satisfied the eligibility requirement that 80% of U.S. employees received grants is measured on a single calendar year basis and does not take into account grants made in prior years

– Employers must withhold taxes at the maximum individual rate in effect at the time the stock with respect to which a Section 83(i) election has been made (deferral stock) is treated as received in income and will be treated as a noncash fringe benefit, which will provide employers additional time to collect amounts required to be withheld from employees

– The employee and employer must agree to place deferral stock in escrow to ensure that applicable withholding taxes are deducted

– An employer may opt out of Section 83(i) by not establishing an escrow arrangement

Broc Romanek