Joseph Hirsch from Globalview Advisors attended the Forum for Corporate Directors 8th Annual Executive Compensation Summit, in collaboration with its Supporting Sponsor, California State University of Fullerton Mihaylo College of Business and Economics, held at The Pacific Club in Newport Beach. Last fall’s elections in 2016 gave us one-party control of the Presidency and both houses of Congress, portending many changes to the Dodd-Frank Act, the Internal Revenue Code, SEC rules, and other governmental regulation, which would have had a major impact on executive compensation. In February of 2017, the Acting Chair of the SEC gave companies further hope that the final SEC rule on CEO pay ratio disclosure would be repealed, amended, or delayed.
Almost one year after the elections, the pace of reform and deregulation have slowed. Most importantly, the SEC staff has recently stated that the CEO pay ratio rule will not be amended or delayed and will require companies to disclose the ratio of their CEO’s pay to that of their median employee in their 2018 proxies. So companies are now wrestling with all of the guidance issued by the SEC’s staff and deciding how best to disclose their ratios, while at the same time reacting to important developments on pay clawbacks and forfeitures, pay-for-performance, long-termism, and other issues. To complicate matters, the upcoming SEC nomination confirmation hearings and legislative activity ahead of the 2018 Congressional elections may still result in major changes, and at the very least create much uncertainty.
This year’s panel of experts will provide a practical assessment of where we are today and where we may be headed on these developments and what Boards and companies should now be doing in making their 2017 year-end pay decisions, designing their 2018 pay plans, and determining and disclosing their CEO pay ratios.
Expert speakers included James Barrall, UCLA Law School Visiting Scholar and Senior Fellow, Of Counsel, and Retired Partner at Latham & Watkins LLP; Roger Brossy, Managing Director at Semler Brossy; and Arnold Pinkston, Director at Bio-Rad Laboratories.
Discussion Topics included:
- Latest updates on Congressional and regulatory actions (and inactions) on executive compensation: Dodd-Frank repeal? Pending SEC and other rules? Tax changes?
- CEO pay ratio disclosure rules will require proxy disclosures in 2018: How are companies determining their ratios? How will they draft their proxies? Will they provide additional commentary to employees, shareholders, customers, or others?
- Increasing focus on compensation clawbacks and forfeitures in event of financial restatements, employee misconduct or damage to a company’s business reputation.
- Increasing investor focus on long-termism: What is it? Can incentive compensation drive it?
- Updates and reminders on say-on-say, director compensation lawsuit, proxy disclosure litigation and any other breaking developments.
The Forum for Corporate Directors was founded in 1991. It is a non-profit business organization committed to increasing the effectiveness of directors, CEOs and senior level executives by anticipating important issues facing companies in today’s global economy and presenting peer-to-peer forums to share ideas and key strategies.