On July 24, 2013, the First Circuit held in Sun Capital Partners III LP v. New England Teamsters & Trucking Indus. Pension Fund that a private equity fund can be jointly and severally liable in certain circumstances for pension liabilities incurred by its portfolio companies.
Client Alert | August 2, 2013
In this update we review recent key developments in UK employment law and look forward to some significant changes that are on the horizon.The Employment Law Review A systematic review of UK employment law by the current Coalition Government began in 2010 and since then a package of reforms aimed at easing the perceived burden of employment regulation on employers (particularly small employers) have been proposed and consulted upon, many over the course of the last year. Some of the more controversial measures have been dropped following consultation, whereas others have been, and will continue to be, implemented this year through the Enterprise and Regulatory Reform Act 2013 ("ERRA"). The UK Employment Tribunals system has also come under scrutiny. Whilst origi
Client Alert | July 31, 2013
On June 26, 2013, the Supreme Court ruled section 3 of the Defense of Marriage Act unconstitutional in United States v. Windsor. This has a number of important implications for employee benefit plans that cover participants who have same-sex spouses.
Client Alert | July 12, 2013
Shareholder proposals continued to attract significant attention during the 2013 proxy season. This client alert provides an overview of shareholder proposals submitted to public companies during the 2013 proxy season, including statistics, notable decisions from the staff (the "Staff") of the Securities and Exchange Commission (the "SEC") on no-action requests and other Staff guidance, majority votes on shareholder proposals and litigation seeking to exclude shareholder proposals. 1. Shareholder Proposal Statistics and Voting ResultsAccording to data from Institutional Shareholder Services ("ISS"), shareholders submitted approximately 820 proposals to date for 2013 shareholder meetings, up from ap
Client Alert | July 9, 2013
Gibson Dunn outlines the trend of shareholder lawsuits related to executive compensation disclosures and suggests strategies for addressing this new proxy litigation.
Client Alert | February 26, 2013
Institutional Shareholder Services ("ISS") and Glass, Lewis & Co., Inc. ("Glass Lewis"), the two major proxy advisory firms, recently released updates to their proxy voting policies for the 2013 proxy season. The ISS U.S.
Client Alert | January 29, 2013
A series of recent articles in the Wall Street Journal have focused on corporate executives who traded in their companies' stock. According to the Journal, some corporate executives who traded in their companies' stock realized gains or avoided losses during the week prior to significant corporate news.
Client Alert | January 22, 2013
The U.S.
Client Alert | January 16, 2013
The start of a new year frequently serves as a time for sales organizations to take stock of past sales performance and develop commission plans for the coming year. But this year, companies with sales or other commission-based employees who provide services in California are faced with a new legal hurdle: Effective January 1, 2013, all commission-based employment contracts must be in writing and set forth the method by which such commissions are computed and paid. While this law--which amends and revives California Labor Code Section 2751--was purportedly enacted to ensure greater certainty and protection, it raises a number of unanswered questions employers may soon face, including questions about: (1) the geographic reach of the law; (2) what terms should be incl
Client Alert | December 27, 2012
Effective on January 1, 2013, the tax cuts enacted by the Bush Administration and extended in December 2010 will automatically end, and tax rates will revert to their pre-2001 levels.
Client Alert | November 19, 2012
With the arrival of fall, calendar-year companies are gearing up for what promises to be another busy proxy season, preparing for new rules that will impact their disclosures and governance practices, and planning their 2013 board and committee calendars.
Client Alert | November 2, 2012
The IRS recently released the inflation-adjusted limitations applicable to tax-qualified retirement plans for 2013. As in 2012, many of these limits are again increasing.
Client Alert | October 29, 2012
Recently, the Internal Revenue Service released two notices, Notice 2012-58 and Notice 2012-59, regarding the employer shared-responsibility penalties and the 90-day waiting period limitation of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the "Act").
Client Alert | October 25, 2012
The New York Stock Exchange ("NYSE") and NASDAQ Stock Market ("NASDAQ") released their proposed compensation committee and compensation adviser independence listing standards on September 25, 2012.
Client Alert | October 24, 2012
On October 15, 2012, Institutional Shareholder Services ("ISS"), a leading proxy advisory firm, issued for comment certain proposed 2013 proxy voting policy changes.
Client Alert | October 16, 2012
On October 16, 2012, the staff of the Securities and Exchange Commission (the "Staff") issued Staff Legal Bulletin No. 14G (Oct.
Client Alert | October 16, 2012
On August 24, 2012, in the case of Fillpoint, LLC v. Maas, a California appellate court issued an opinion reinforcing both California's general public policy against covenants not to compete and the important exceptions to that rule. While California Business and Professions Code § 16600 generally declares void any covenant that restrains an individual from engaging in a lawful profession, trade or business, § 16601 provides an exception to this rule for covenants executed in connection with the sale of a business. The Fillpoint case instructs that, to qualify for § 16601's sale-of-business exception, employers must thoroughly document and tether any non-compete covenant to the sale of a business.Fillpoint: Factual Background.In Fillpoint, Michael Maas worked
Client Alert | September 20, 2012
Employers Should Review Plans and Agreements in Which Payment is Conditioned Upon Signing a Release or Agreement to Comply with Restrictive Covenants
Client Alert | September 14, 2012
Recently, the Internal Revenue Service ("IRS") published final regulations concerning the deductibility of the use of business aircraft for personal purposes.
Client Alert | September 12, 2012
On July 6, 2012, President Obama signed the Moving Ahead for Progress in the 21st Century Act, which primarily addresses transportation funding and student loan interest rates. The Act also provides significant short-term pension funding relief to sponsors of defined benefit pension plans, increases Pension Benefit Guaranty Corporation (PBGC) premiums for single and multiemployer plans, and extends and liberalizes the ability to use assets from certain overfunded pension plans to provide retiree welfare benefits.Pension Funding ReliefIn general, ERISA and the Internal Revenue Code require minimum annual pension contributions in an amount equal to the sum of the "normal cost" of the plan for the year (i.e., the benefit accruals for the year) plus an amount necessary to amort
Client Alert | July 9, 2012
On June 20, 2012, the United States Securities and Exchange Commission (the "SEC") adopted rules under Section 10C of the Securities Exchange Act of 1934, as mandated by Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"). As mandated by Dodd-Frank, the SEC rules require stock exchanges to adopt listing standards that (1) impose independence requirements on compensation committee members; (2) require companies to authorize compensation committees to retain compensation consultants and other advisers; and (3) require compensation committees to assess the independence of any consultant, legal counsel or other adviser selected by the committee. Stock exchanges have until September 25, 2012, to propose listing standards un
Client Alert | July 2, 2012
When the former CEO of a Delaware corporation headquartered in California sues his employer for retaliatory termination, which state's laws apply? In its recent decision in Lidow v. Superior Court, a California Court of Appeal allowed the ex-CEO's claims to proceed under California law, refusing to apply a conflict of laws principle known as the "internal affairs doctrine," which otherwise would have barred his action under Delaware law.The internal affairs doctrine holds that the laws of the state of incorporation should normally govern a corporation's internal affairs. The United States Supreme Court, citing this doctrine with approval, has described "internal affairs" as "matters peculiar to the relationships among or between the corporation and i
Client Alert | June 26, 2012
Earlier this year we reported on the UK Government's proposals to give shareholders of companies greater influence over executive pay through the use of binding votes.
Client Alert | June 21, 2012
There have been a number of significant shareholder proposals submitted during the 2012 proxy season to date. This alert summarizes notable responses by the Securities and Exchange Commission (the "SEC") staff (the "Staff") to no-action requests concerning many of these shareholder proposals. By way of background, according to Institutional Shareholder Services ("ISS"), 1,105 proposals have been submitted to companies to date for 2012 annual meetings. As of May 22, 2012, 303 no-action requests had been submitted to the SEC since October 1, 2011. This is comparable to the number of shareholder proposal no-action requests submitted during a similar period in 2011. Moreover, repeating the experience in 2011, the number o
Client Alert | May 29, 2012
The Department of Labor recently released final regulations requiring U.S.
Client Alert | May 7, 2012
On March 14, 2012, the UK Government published a consultation paper on its proposals to give shareholders of quoted companies a greater influence over executive pay.The Government proposes to introduce a binding shareholder vote on executive pay policy (possibly requiring a 65% or 75% super majority), a non-binding shareholder vote on the subsequent application of that pay policy and a binding shareholder vote on exit payments in excess of one year's basic salary. The new rules would apply to certain UK quoted companies. The new rules would apply to those companies with either a standard or a premium listing on the London Stock Exchange main market and UK incorporated companies listed on the NYSE, NASDAQ or officially listed in another EEA member state but would not
Client Alert | April 18, 2012
Institutional Shareholder Services ("ISS"), a leading proxy advisory firm, recently announced updates to its Governance Risk Indicators (GRId) methodology for U.S.
Client Alert | February 21, 2012
The Business Secretary of the British government ("Government"), Vince Cable, announced a week ago a package of controversial plans in a bid to transform UK executive pay culture. Under a new-four-pronged approach, shareholders would for the first time be given a binding vote on executive pay packages. Executive boards may also need to become more diverse -- including at least two individuals that had not previously been on a board of directors, and people from a broader range of professional backgrounds.
Client Alert | January 31, 2012
In this client alert we review some of the key developments that have taken place in UK employment law during 2011 and look forward to some significant changes that are on the horizon for 2012.
Client Alert | January 9, 2012
The past year has been one of change and challenge for public companies and their boards, as companies have moved to implement "say-on-pay" and other provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"). With the 2012 proxy season on the horizon, public companies and their directors will continue to feel the impact of Dodd-Frank as the Securities and Exchange Commission ("SEC") proceeds with its ongoing efforts to implement the law. At the same time, public companies and their boards are operating in an environment where the balance of power between boards and shareholders continues to shift. The traditional, board-centric model of corporate governance continues to gravitate toward a paradigm that include
Client Alert | January 3, 2012
On December 20, 2011, Institutional Shareholder Services ("ISS"), a leading proxy advisory firm, published a white paper titled "Evaluating Pay for Performance Alignment: ISS' Quantitative and Qualitative Approach." The white paper provides greater guidance on ISS' new approach to establishing peer groups when conducting the pay-for-performance test described in its U.S.
Client Alert | December 27, 2011
On November 17, 2011, Institutional Shareholder Services ("ISS"), a leading proxy advisory firm, released its U.S. and international corporate governance policy updates for the 2012 proxy season.
Client Alert | November 23, 2011
On October 20, 2011, the IRS released the inflation-adjusted limitations applicable to tax-qualified retirement plans for 2012. Unlike for 2011, most of the limits are increasing. In addition to the impact of these limitations on tax-qualified retirement plans, the compensation limit under section 401(a)(17) of the Internal Revenue Code also affects the amount of severance pay that may be excludable from coverage under section 409A of the Code in certain circumstances.
Client Alert | October 20, 2011
On Tuesday, October 11, 2011, the Federal Reserve Board ("Fed") and the Office of the Comptroller of the Currency ("OCC") released for public comment and the Federal Deposit Insurance Corporation (the "FDIC") met in open session and unanimously approved and released proposed rules implementing the Volcker Rule, Section 619 of the Dodd-Frank Consumer Protection Act of 2010 ("Dodd-Frank"). The Securities and Exchange Commission ("SEC") voted unanimously to approve the proposed rule on Wednesday, October 12.
Client Alert | October 12, 2011
The Indonesian House of Representatives on 31 May 2011 passed Law No.
Client Alert | July 15, 2011
The Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act (the "Act") requires plan sponsors to amend their cafeteria plans, including medical flexible spending accounts ("FSAs"), health reimbursement arrangements ("HRAs"), health savings accounts ("HSAs"), and Archer medical savings accounts ("Archer MSAs"), with respect to reimbursements for the purchase of over-the-counter drugs by no later than June 30, 2011.Effective January 1, 2011 (and January 16, 2011 with respect to debit card transactions), the Act prohibits FSAs, HRAs, HSAs, and Archer MSAs from reimbursing plan participants for the purchase of over-the-counter drugs, unless the participant has obtained a prescription for such
Client Alert | June 15, 2011
Washington, D.C. partner Jason Schwartz and associate Michael Murray are the authors of "Recent Developments in Trade Secret Law: the Computer Fraud and Abuse Act" [PDF] published in the June 10, 2011 issue of the Society for Human Resource Management's Workplace Law Bulletin.
Client Alert | June 10, 2011
Printable PDFOn March 30, 2011, the Securities and Exchange Commission (the "SEC") voted unanimously to propose rules implementing Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") relating to: (1) compensation committee member independence; (2) compensation consultant and other adviser independence; and (3) compensation committee authority to retain, and disclosure regarding use of, compensation consultants and other advisers. In our July 21, 2010 client memorandum, available here, we describe in detail Section 952 of the Dodd-Frank Act, which added a new Section 10C to the Securities Exchange Act of 1934 (the "Exchange Act").The proposing release is available here. The SEC is seeking public
Client Alert | March 31, 2011
Printable PDFAt an open meeting held on January 25, 2011, the Securities and Exchange Commission ("SEC") voted to approve rules to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") relating to shareholder advisory votes on executive compensation ("say-on-pay"), shareholder advisory votes on the frequency of conducting say-on-pay votes ("say-on-frequency") and shareholder advisory votes on compensation arrangements in connection with significant corporate transactions ("say-on-golden-parachutes").
Client Alert | January 25, 2011
On November 9, 2010, the U.S.
Client Alert | December 21, 2010
On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the Act). The Act extends the existing individual income tax rates and a number of expiring credits and other benefits, provides a few new temporary tax incentives, and establishes new gift and estate tax rates and exemptions.Extension of Expiring Tax ProvisionsThe Act extends the current income rates (which reach a maximum marginal rate of 35%) through the end of 2012 for all taxpayers.
Client Alert | December 20, 2010
In the past three years, international regulatory focus on remuneration has gripped the globe. The heart of the debate which arose in the context of remuneration structures in investment banking and their contribution to global financial crisis has extended past this into remuneration across a broad range of industries.
Client Alert | December 20, 2010
The year 2010 has witnessed many legal developments applicable to U.S.
Client Alert | December 16, 2010
The United States Labor Department has proposed an important amendment to its regulations defining fiduciary status under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). If the amendment is finalized in its proposed form, it will substantially expand the classes of service providers subject to ERISA's fiduciary duty and prohibited transaction rules.
Client Alert | November 1, 2010
On October 28, 2010, the IRS released the inflation-adjusted limitations applicable to tax-qualified retirement plans for 2011. Due to low inflation, the limitations have not changed from those applicable for 2010. In addition to the impact of these limitations on tax-qualified retirement plans, the compensation limit under section 401(a)(17) of the Internal Revenue Code also affects the amount of severance pay that may be excludable from coverage under section 409A of the Code in certain circumstances.
Client Alert | November 1, 2010
Individual account plan administrators should consider amendments to their 401(k) and 403(b) plans and summary plan descriptions (SPDs) in order to implement two recent legislative and regulatory items. First, the Department of Labor recently released a final rule requiring plan administrators to provide participants and beneficiaries with certain investment fee and expense information. Plan SPDs will need to be amended in order to comply with these new requirements. Second, legislation was recently enacted authorizing 401(k) and 403(b) plans to allow in-plan Roth conversions. A plan amendment is required to authorize the conversions. The details of these new items are outlined below.
Client Alert | October 26, 2010
Printable PDFOn October 18, 2010, the Securities and Exchange Commission ("SEC") proposed rules, available here, to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") relating to: (1) shareholder advisory votes on executive compensation ("say-on-pay"); (2) shareholder advisory votes on the frequency of say-on-pay votes ("say-on-frequency"); and (3) shareholder advisory votes on compensation arrangements in connection with significant corporate transactions ("say-on-golden-parachutes"). The proposal includes transition provisions that companies may rely on until final rules are adopted. The SEC also proposed rules, available here, relating to
Client Alert | October 19, 2010
In Quan v. Computer Sciences Corp., __ F.3d __, 2010 U.S. App. Lexis 20199 (9th Cir. 2010), the Ninth Circuit held that the presumption of prudence first articulated by the Third Circuit in Moench v. Robertson, 62 F.3d 553 (3d Cir.
Client Alert | October 15, 2010
Washington, D.C. partners Amy Goodman, Ronald Mueller and Elizabeth Ising are the authors of "Executive Compensation, Corporate Governance and Other Securities Disclosure Provisions in the Dodd-Frank U.S.
Client Alert | September 21, 2010
Munich partner Mark Zimmer and associate Robert C.J. Heymann are the authors of "Beteiligungsrechte des Betriebsrats bei unternehmensinternen Ermittlungen" [PDF] published in the July 26, 2010 issue of Betriebs-Berater's Arbeitsrecht.
Article | July 26, 2010