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Evaluating Performance Goals and Incentive Compensation in Light of COVID-19

Boards and compensation committees will be reevaluating their incentive compensation arrangements in light of the COVID-19 pandemic and the resulting market uncertainty. Both long-term and short-term incentive plans can lose motivational and retention value if the performance goals are unachievable or if they do not align with market reality. Companies that have not yet established performance goals for their 2020 equity and bonus awards should carefully consider market conditions and shareholder perception before establishing goals, focusing on motivating their executives with pay for performance that aligns with shareholders?ÇÖ interests, while giving the company flexibility to navigate through uncharted territory. To the extent possible, companies should also consider delaying the issuance of incentive compensation awards until there is more stability in the business and in the financial markets. Companies that have already established goals for their 2020 awards (or that are evaluating the continued effectiveness of performance goals for prior year… Continue Reading

Reminder: Upcoming July 6 Deadline to Register Share Plans in the United Kingdom

July 6, 2015 is the deadline to register and self-certify share-based incentive plans or schemes, whether tax-advantaged or non-tax-advantaged, that are sponsored or maintained by companies for the benefit of their employees in the United Kingdom (“U.K.“). The registration and self-certification can be completed online with U.K. tax authorities (HM Revenue and Customs). Failure to meet the July 6, 2015 deadline may result in losing tax advantages and incurring penalties. For more information on the U.K. share registration requirement, please see our prior post here.

United Kingdom Share Plan Registration Deadline This Year

Pursuant to changes in United Kingdom (?Ç£UK?Ç¥) tax legislation, companies that sponsor or maintain any share-based incentive plans or schemes (tax-advantaged or non-tax-advantaged plans) in which UK employees participate must be registered and self-certified online with the UK tax authorities (HM Revenue & Customs). The registration deadline for all new and existing share plans is July 6, 2015. Failure to meet the deadline may result in losing tax advantages and/or incurring penalties. With respect to non-UK companies, any plans under which stock options, stock appreciation rights, restricted stock, restricted stock units, or other equity awards are granted to UK employees should be registered.

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