Chapter 1. Introduction.
Should the CEO be Rewarded or Punished for Events Beyond the CEO's Control?
Warren E. Buffett on Executive Compensation.
CEO Compensation Theories.
CEO Forced Exit Packages.
Private Equity Compensation.
Entertainment and Sports Celebrities.
Benefits of Good Corporate Governance.
Chapter 2. Motivating Executive Performance.
Tying Performance to the Strategic Plan.
Unintended Consequences.
Firm Expansion and CEO Pay.
Equity-Based Compensation.
A New Role for CEOs.
Minimum Equity Ownership Requirements.
Chapter 3. Peer Groups and Benchmarking.
Adjusting the Peer Group.
Peer Groups for Different Levels of Executives.
Benchmarking.
Lake Wobegon Effect.
Benchmarking with Medians.
Chapter 4. Competing with Private Equity Funds.
Chapter 5. Explaining Eexcutive Compensation to Shareholders.
Introduction.
Reconstructing Executive Compensation Disclosure for Shareholders.
Satisfying Investor Expectations.
Chapter 6: Compensation Committee Ordinary Operations.
SEC Action against Tyson Foods.
Earnings on Deferred Compensation.
Practical Steps for Compensation Committees.
Other Best Practices.
Chapter 7. Negotiating Executive Employment and Severance Agreements.
Negotiating With New CEO Candidates.
Negotiating With Existing CEOs.
Best Practices Applicable to New and Existing CEOs.
Council of Institutional Investors.
Gross-Up Clauses.
Retirement Arrangements.
The Grasso Case.
Section 409A of the Internal Revenue Code.
Best Practices in Negotiating Employment or Severance Agreements.
Chapter 8. Compensation Committe Structure and Process.
Creating Incentives for Good Corporate Governance.
Disney Litigation.
Chapter 9. Equity Incentive Choices.
Overview of Equity Incentives for Key Employees.
Dilution.
Stock Option versus Stock Appreciation Rights.
Restricted Stock versus SARs or Phantom Appreciation Plans.
Phantom Plans.
ISOs versus Non-ISOs.
The Advantage of ISOs.
Non-ISOs with Tax Reimbursement.
The Tax Benefit to the Company.
Chapter 10. Option Granting Practices.
Option Granting Practices.
The Council of Institutional Investors.
Equity Retention Practices.
Chapter 11. Director Compensation.
Retainer and Differential Pay.
Minimum Equity Requirements.
Director Compensation Procedure and Process.
Shareholder Approval.
Perquisites, Repricing and Exchange Programs, Change in Control and Severance Payments.
Disgorgement.
Chapter 12. Negotiating for the Executive.
CEO Turnover.
New Candidates for CEO or Other Executive Positions.
Employment Agreements with Private Equity Buyers of CEO's Business.
Chapter 13. Executive Compensation and Section 409A of the Internal Revenue Code.
Background.
Plans That Do Not Provide For the Deferral of Compensation.
Nonqualified Deferred Compensation Plan – Plans That Provide For Deferred Compensation.
Special Rule Applicable to Specified Employees.
Change-in-Control Events.
Change in the Ownership of a Corporation.
Change in the Effective Control of a Corporation.
Change in Ownership of a Substantial Portion of a Corporation's Assets.
Structuring the Payments upon an Event Payment Trigger.
Specified Time or Fixed Schedule.
Equity-Based Compensation.
Section 409A Compliance.
Appendix A. Compensation Committee Charter.
Appendix B. Corporate and Securities Update: SEC Adopts Sweeping Overhaul of its Executive Compensation Disclosure Requirements (September 2006).
Appendix C. Employment Agreement.
Appendix D. Public Company Equity Incentive Plan.
Appendix E. Search Terms Typically Required to be Researched by Public Company in Option Backdating Investigations by the Securities and Exchange Commission.
Appendix F. What an Employee Should Know about His or Her Stock Options.
