Executive & Equity Compensation

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Maintain and grow your competitive edge with strategic and legally compliant compensation arrangements.

Sound executive compensation arrangements are critical for attracting the right talent and rewarding performance. Done right, they encourage company growth, increase productivity, and drive engagement. In the design of these arrangements, companies must also be concerned with controlling costs and maximizing profits, avoiding adverse publicity, and keeping pace with ever-changing tax and securities laws.

HOW WE HELP

Our Executive & Equity Compensation team approaches executive compensation matters both strategically and technically to ensure that each client’s business needs are met within the applicable legal frameworks. We understand the importance of effective compensation plans and practices in helping businesses attract and motivate leaders, senior managers, and other key employees. Our Executive & Equity Compensation attorneys have diverse backgrounds in related fields, from serving as in-house counsel, to working in accounting firms and the consulting industry. As a result, we are well-positioned to provide clients with workable solutions to their equity and executive compensation issues, from executive transition, equity compensation, and change-in-control protection, to management retention initiatives, performance incentive plans, and more.

We work closely with management and their non-legal advisors to craft appropriate employment, retention, and separation agreements for each client’s particular situation. We give due consideration to the competing needs of quickly “closing the deal” and protecting the company against overcompensating non-productive or culturally mismatched executives. Drawing upon our firm’s strengths in the employment law field, we draft concise documents that clearly reflect the economic agreement of the parties and also deal with the legal aspects such as restrictive covenants and clawbacks for misconduct.

 We can help clarify the goals for innovative incentive compensation programs, define performance objectives, structure them to meet compliance requirements, and place strategic limits on the benefits payable under them.

 Our team has represented some of the largest and most well-known public companies engaged in industries such as manufacturing, retail, health care, insurance, and financial services. We also routinely represent closely held businesses, which have unique equity and executive compensation considerations given the lack of a public market for their equity, and tax-exempt organizations. As such, our attorneys are experienced in partnering with these businesses to find practical solutions.

OUR SERVICES

We offer a comprehensive approach to equity and executive compensation matters. We have found that it does not necessarily serve the best interest of clients to look at each issue in a vacuum. Many compensation issues are interrelated, so we employ a holistic approach to the assessments we make and the counsel we provide. Our services include: 

Equity Compensation. Vital to all companies competing for top talent, equity compensation is an important component of providing appropriate performance incentives and rewarding exceptional performance. We design and implement broad-based and executive-level equity compensation plans, including incentive stock option and nonqualified stock option plans, restricted stock and restricted stock unit awards, performance shares, and stock appreciation rights plans, as well as employee stock ownership plans. Although we do not give accounting advice, our practitioners are also familiar with the critical accounting policies associated with equity compensation plan design and operation, including issues raised by net exercises, performance-based awards, option modifications, and repricings. 

Nonqualified Deferred Compensation. Perhaps the biggest advantage of nonqualified deferred compensation plans is the ability for executives to accumulate meaningful retirement benefits in light of restrictive limits under traditional tax-qualified profit-sharing and pension plans. We regularly represent clients in designing nonqualified deferred compensation programs, including make-whole plans that replace benefits not received due to tax-qualified plan limits, elective deferred compensation plans, supplemental executive retirement plans, and rabbi trusts. We understand that effective compensation planning requires a strategy that meets a client’s needs, while accommodating continual change in tax, ERISA, labor, employment, corporate, securities, and stock exchange rules, as well as accounting principles. We focus on practical and legal ways to provide flexible access to nonqualified deferred compensation prior to retirement without running afoul of Code Section 409A, Code Section 457 (in the context of tax-exempt organizations), constructive receipt rules, and potential ERISA pitfalls.

SEC Compliance. SEC regulations on executive compensation, especially those affecting post-employment payments and Compensation Discussion and Analysis (CD&A), present companies with ever greater challenges when determining how to handle disclosure requirements. Seyfarth’s Executive Compensation team works with clients to help ensure regulatory compliance without compromising the integrity of privileged information. We also assist clients with crafting communication pieces, executive summaries, the CD&A, SEC filings (including Form 8-K), and other proxy disclosures. Our executive compensation and securities law practices are coordinated to ensure that a client’s policies, procedures, and disclosures are in full compliance with all technical requirements of applicable rules and regulations of the SEC and the national securities exchanges.