Bloated executive salaries, the receptionist who becomes a multimillionaire as a result of stock options, boards of directors approving outsize executive pay packages without really understanding them. All of these situations and more arise in the field of Executive and Equity Compensation, part of the larger practice area of Employee Benefits Law.
This course examines the most important current issues in executive and equity compensation: the challenges of crafting competitive yet reasonable compensation packages for key executives; stock options and the growth and continued prosperity of Silicon Valley; the use of equity compensation to recruit, retain and incentivize employees; and emerging corporate responsibilities for oversight and disclosure. It also examines specific newsworthy topics, including executive pay scandals (such as that involving Michael Eisner), performance based compensation and employee equity ownership in the light of company failures (such as that of Bear Stearns), option backdating and shareholder activism. It analyzes various types of executive and equity arrangements: general executive employment and bonus agreements; severance arrangements; golden parachutes; change in control plans; stock option plans; restricted stock plans; stock appreciation and phantom stock arrangements; employee stock ownership plans and nonqualified deferred compensation arrangements. In order to do this, the class will closely examine the various areas of law that govern executive and equity compensation: the Internal Revenue Code (very selective sections), securities law requirements, Sarbanes Oxley, applicable stock exchange requirements and other applicable laws and regulations.