The system of rewarding top executives for their performance and contribution to the company, including the use of stock options, bonuses, and other incentives.
Executive Compensation: This topic covers the basics of executive compensation, including how it is designed, what types of compensation are typically offered, and the different considerations that go into determining executive pay.
Corporate Governance: This topic looks at how companies are run and controlled, including the roles of executives, board members, and other stakeholders.
Shareholder Value: This topic looks at the central goal of corporate governance, which is to create value for shareholders. It covers different ways of measuring shareholder value and how executive compensation can align with this goal.
Equity-Based Compensation: This topic covers stock options, restricted stock units, and other forms of equity-based compensation that are commonly used to reward executives and align their interests with those of shareholders.
Pay-for-Performance: This topic looks at how executive compensation can be structured to reward performance, including the use of performance metrics, target setting, and other approaches.
Compensation Committees: This topic looks at the role of compensation committees, which are responsible for designing and approving executive compensation plans. It covers the legal requirements for compensation committees and best practices for their operation.
Say-on-Pay: This topic covers the say-on-pay vote, which gives shareholders a non-binding vote on executive compensation. It looks at the history of say-on-pay and the impact it has had on executive compensation.
Clawbacks: This topic looks at clawback provisions, which allow companies to recover executive pay if certain conditions are met. It covers the types of events that can trigger a clawback and the legal and practical considerations involved.
Golden Parachutes: This topic looks at golden parachute agreements, which provide severance payments to executives in the event of a change of control or other specified events. It covers the different approaches to designing golden parachutes and the pros and cons of using them.
Executive Contracts: This topic looks at the legal and practical considerations involved in designing executive contracts, including the different types of contracts, the inclusion of non-compete and non-solicitation clauses, and best practices for negotiating executive contracts.
Base Salary: This is the fixed salary paid to an executive for their role in the company.
Bonuses: These are additional payments made to executives as a reward for achieving specific goals or targets.
Stock options: Executives are given the option to buy company shares at a set price at a specific time.
Restricted Stock Units (RSUs): Executives are given the promise of company shares, which are granted to them at a later date.
Long-term incentives: These are often tied to the company’s profitability or share price over a longer period.
Deferred compensation: A portion of the executive’s pay is deferred until a later point in time, often to incentivize them to stay with the company.
Retirement benefits: These can include company contributions to pension plans, 401(k) plans, and other retirement funds.
Perks: These can include company-provided vehicles, housing, travel allowances, and other non-cash benefits.
Golden parachutes: These are often included in executive contracts and provide a significant payout if the executive is terminated without cause or if there is a change in control of the company.
Clawbacks: These allow a company to reclaim funds paid to an executive if they engage in unethical or illegal behavior.