Because of evolving laws and regulations, coupled with increased scrutiny into corporate governance and compensation practices, publicly traded corporations, privately held entities and their individual executives and directors are facing a more complex environment from even a year ago. Lawyers in Sidley’s Corporate Governance and Executive Compensation practice are sought out for sophisticated advice and counsel on the full spectrum of issues they face.
Our team regularly advises corporate management, boards of directors and board committees on a wide variety of corporate governance matters, including corporate responsibility, fiduciary duties, board oversight responsibilities, financial disclosure, legal compliance and issues arising under Sarbanes-Oxley and the Dodd-Frank legislation. Our advice relates to the procedural aspects as well as the legal consequences of corporate and securities transactions and other corporate actions, including takeover defenses, proxy contests, SEC filings and disclosure issues, stock option issues and general corporate law matters. Depending on the client, such work may also involve counsel regarding a wide range of business actions and responses - mixing legal issues with sound, practical advice. Our broad client base allows us to provide advice regarding best practices and trends in such matters as directors’ and officers’ responsibilities, board and committee practices, disclosure controls and procedures, internal controls, executive compensation and other matters.
We have experience with respect to proposals submitted by public company shareholders under Rule 14a-8, focusing on negotiations with shareholder proponents, filings with the SEC and the likely reaction of institutional investors and their advisors, such as Institutional Shareholder Services. Proposals that we have addressed in recent years include those relating to anti-takeover defenses, executive compensation, environmental matters, proxy access and the voting standard to be used for the election of directors.
The depth of our corporate practice allows us to advise clients on highly focused corporate law matters quickly and efficiently. Although we have extensive experience in the corporate laws of the jurisdictions in which our U.S. offices are located, our heavy concentration of publicly traded clients requires an intimate knowledge of Delaware corporate law as well. As part of our corporate practice, including our work in the capital markets, securitization, tax and bankruptcy areas, we frequently deal with questions of parent-subsidiary relationships and structuring inter-company transactions in a variety of jurisdictions, both within and outside of the U.S.
We counsel our clients with respect to all aspects of compensation arrangements, including disclosure, equity-based incentive and bonus plan design, employment and severance agreements and deferred compensation. We assist our clients in complying with regulations issued by the Securities and Exchange Commission and self-regulatory organizations (i.e., the New York Stock Exchange and NASDAQ) governing matters such as executive compensation disclosure, shareholder approval requirements, transactions in company stock by officers and directors and short-swing liability. We have extensive experience in advising on the tax aspects of compensation arrangements, including Section 409A of the Internal Revenue Code. We also advise on executive compensation matters arising in connection with merger and acquisition transactions, such as the treatment in these transactions of stock options and other equity-based awards, and the implementation of change-in-control agreements and the payment of benefits under these agreements.
Our Executive Compensation practice brings together the experience of lawyers in our Securities, Corporate Governance and Compliance and Employee Benefits groups. We also rely upon the experience of lawyers in our Labor, Employment and Immigration practice and utilize their litigation experience where necessary.
Through our regular work with executive compensation consultants and our active involvement in professional organizations such as the American Bar Association and the National Association of Stock Plan Professionals, we are in the forefront of industry trends in the compensation of executives and other employees, and yet we regularly counsel our clients to consider their own needs carefully and not simply “follow the herd.”
The following services are at the core of our Executive Compensation practice:
Advising with respect to the disclosure requirements applicable to executive and director compensation arrangements, including new disclosure and say-on-pay requirements under the oversight provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”)
Equity and Other Incentive Compensation Plans
Designing and drafting equity and other incentive compensation plans, including stock option plans, long-term incentive plans and bonus plans, and advising with respect to the securities law and tax aspects of the implementation of such plans
Negotiating and preparing executive agreements, including employment agreements, change-in-control agreements and separation agreements
Assisting in the wide variety of merger and acquisition transactions handled by the firm by advising as to the treatment of stock options and other forms of equity-based compensation and issues relating to change-in-control plans and agreements and retention arrangements
Section 16 Advice
Providing advice with respect to the reporting and short-swing liability rules under Section 16 of the Securities Exchange Act of 1934, particularly in the context of equity compensation plans and corporate transactions
Providing advice with respect to the tax rules governing deferred compensation (Section 409A), “parachute” payments (Sections 280G and 4999) and limits on the deduction of compensation in excess of $1 million paid to senior executives (Section 162(m))