Live, from Austin, Texas (and Washington, D.C.) ... The American Bar Association’s Employee Benefits, Executive Compensation & Section 16 Subcommittee, chaired by Howard Dicker and Mark Borges, discussed a few critical issues at its meeting on November 22 (nothing says “wake up and smell the coffee” like an 8 a.m. EST meeting of tax and securities lawyers), including:

  • Rule 16b-3 Clarification from SEC Needed – Alan Dye (Hogan Lovells), Pamela Baker (Dentons) and I discussed the Section 16 reporting requirements for contributions to and transactions under a typical non-qualified deferred compensation plan, and how it may be in need of further clarification from the SEC staff to be within the meaning of “excess benefit plan” in some cases. The application of this exemption has become more critical in light of the SEC’s September enforcement actions against companies and individuals for violations of the Section 16(a) company stock purchase or sale reporting requirements (see Reactions to SEC Enforcement Actions on Section 16(a)). The SEC position on this matter has been less than clear since 1999. Stay tuned.
  • Clawback Design and Variable Accounting: A Hair Raising Issue – Steve Seelig (Towers Watson) discussed the fact that at least one Big Four audit firm is raising the alarm that some common clawbacks designs could create variable accounting for equity awards (not a good thing).
  • Gratuitous 162(m) disclosures in Proxy Statements – John Kelsh (Sidley & Austin), Ron Mueller (Gibson Dunn) and I discussed views of whether gratuitous discussions of IRC 162(m) compliance have any place in proxy statements.
  • Dudenhoeffer Stock Drop Litigation – I briefly reminded the members of continuing litigation in the ERISA area whereby personal liability as a fiduciary might be avoided by simply changing the wording in documents so that SEC filings are not incorporated by reference. 

More to follow on the first three.