Proposed rules were issued jointly by several federal agencies, to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition on incentive-based compensation arrangements that encourage inappropriate risk taking by covered financial institutions and are deemed to be excessive or that may lead to material losses.?á Generally, the proposed rules apply to covered institutions, including national banks, state member banks, U.S. operations of a foreign bank with more than $1 billion in assets, and others.?á The proposed rules clarify that incentive-based compensation is “excessive” if the amounts are unreasonable or disproportionate to the services performed.?á An incentive-based compensation arrangement will be considered to encourage “inappropriate risks” unless it balances risks and financial rewards, is compatible with effective controls and risk management, and is supported by strong corporate governance.?á Covered institutions with at least?á$50 billion in assets must defer at least half of the incentive-based compensation of executive officers for… Continue Reading
The Department of Labor has issued final regulations addressing new disclosure rules that apply to plan administrators of ?Ç£participant-directed individual account plans.” While these new rules do not apply until plan years beginning on or after November 1, 2011 (for calendar year plans?ÇöJanuary 1, 2012), employers should begin talking to their third party adminstrators early this year to be sure the necessary disclosures and comparative information will be provided in accordance with these final regulations. You can find a detailed memorandum describing the new rules, along with links to the final regulations and the DOL’s model chart for providing the comparative information by clicking?áhere.
The Polish government recently adopted an amendment to Article 24.11 the Polish Personal Income Tax Law (PPIT) which, effective January 1, 2011, restricts the ability to defer tax on the awards.?á Article 24.11 of the PPIT provides an exemption for employees to defer the taxation of their equity based awards until the sale of the underlying shares so long as: (i) the shares which were delivered at vesting or exercise were newly issued shares, and (ii) the equity awards were approved by a resolution of the shareholders of the granting company.?á Effective January 1, 2011, the amendment broadens Article 24.11 by expanding the types of shares eligible for the exemption to existing shares (in addition to newly issued shares), but narrows the exemption by limiting the types of shares to those issued by an entity headquartered in the European Union or the European Economic Area.?á U.S. companies with equity based… Continue Reading
IRS Announces Changes to Rules for Income Tax Withholding for Nonresident Aliens Performing Services in the United States
The Internal Revenue Service recently announced that the withholding tables for wages paid on or after January 1, 2011 will not reflect the Making Work Pay Credit, and that Notice 2009-91 will not apply in determining the withholding on nonresident aliens.?á According to IRS Notice 2011-12, employers must determine income tax withholdings for nonresident aliens performing services within the United States using the procedure explained in Notice 2005-76, together with the tables in the revisions of Publication 15 (Circular E), Employer?ÇÖs Tax Guide, and Notice 1036, Early Release Copies of the 2011 Percentage Method Tables for Income Tax Withholding that are in effect when the wages are paid.?á Employers should implement the new withholding tables as soon as possible, but not later than January 31, 2011.
?á The Third Circuit ruled that the purchaser of assets of an employer obligated to contribute to a multiemployer plan may, under certain circumstances, be held liable for the seller’s delinquent contributions to that plan.?á?áAccording to the Court,?ásuccessor liability?ámay?áexist where the purchaser had notice of?áthe liability prior to the sale and there exists sufficient evidence of continuity?áof operations?ábetween the purchaser and seller.?á Einhorn v. M.L. Ruberton Construction Co., No. 09-4204 (3rd Cir. Jan. 21, 2011).
>Gibson has filed suit against another defendant alleging infringement of its concert simulation patent. This time, it involves Seven45 Studios’ new video game Power Gig: Rise of the SixString. Gibson lost its first suit involving the same patent against Activision in 2009. In June of 2010, Gibson settled with Harmonix, Viacom, and EA in a similar suit.
A federal district court in Florida has held that the individual insurance coverage mandate under the federal health care reform law is unconstitutional. Further, the court concluded that the insurance mandate could not be severed from the broader health reform law and that it therefore rendered the entire law unconstitutional. Texas was among 26 states that brought the action challenging the constitutionality of the individual coverage mandate, which is not scheduled to take effect until 2014. This is the second district court to hold the individual coverage mandate unconstitutional, while two other district courts held it constitutional. Florida vs. U.S. Dept. of Health and Human Services, Case No.: 3:10-cv-91-RV/EMT (N.D. Fla. January 31, 2011).
On January 25, 2011, the Securities and Exchange Commission (SEC) adopted final rules implementing the approval of executive compensation (and frequency of approval of executive compensation) and golden parachute compensation as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the final rules, public companies subject to the federal proxy rules are required to: (1) provide their shareholders with an advisory vote on executive compensation at least once every three calendar years (?Ç£say-on-pay?Ç¥), (2) provide their shareholders with an advisory vote on the desired frequency of these votes at least once every six calendar years (say-on-frequency); (3) provide shareholders with an advisory vote on golden parachute arrangements and understandings in connection with merger and other corporate transactions (say-on-golden-parachute compensation); and (4) provide additional disclosure of golden parachute arrangements in merger proxy statements. The say-on-pay and say-on-frequency votes are required at least once every three years and every… Continue Reading