Executive compensation and employee benefits—United States—Q&A guide

The following Share Incentives practice note provides comprehensive and up to date legal information covering:

  • Executive compensation and employee benefits—United States—Q&A guide
  • 1. Provide an overview of the primary sources of law, regulation and practice that govern or affect executive compensation arrangements or employee benefits.
  • 2. What are the primary government agencies or other entities responsible for enforcing these rules?
  • 3. Are any types of compensation or benefits generally subject to specific corporate governance requirements or approval by shareholders or government agencies? What is the general process for obtaining approval?
  • 4. Under what circumstances does the establishment or change of an executive compensation or benefit arrangement generally require consultation with a union, works council or similar body?
  • 5. Are any types of compensation or benefit arrangements prohibited either generally or with respect to senior management?
  • 6. What rules apply to compensation and benefits of non-executive directors?
  • 7. Must any aspects of an executive’s compensation be publicly disclosed or disclosed to the government? How?
  • 8. Are employment agreements required or prevalent? If so, what provisions are common? Are any terms prohibited or unenforceable?
  • 9. What are the prevalent types and structures of incentive compensation? Do they vary by level or type of organisation?
  • More...

Executive compensation and employee benefits—United States—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to executive compensation and employee benefits in United States published as part of the Lexology Getting the Deal Through series by Law Business Research (published: November 2020).

Authors: Mayer Brown LLP—Maureen J Gorman; Debra B Hoffman

1. Provide an overview of the primary sources of law, regulation and practice that govern or affect executive compensation arrangements or employee benefits.

In the United States, broad-based employee benefit programmes are generally subject only to federal laws while executive compensation arrangements are, in most cases, subject to various federal and state laws. In the case of both employee benefit plans and executive compensation arrangements, the applicable laws affect their structure, taxation, governance and public disclosure.

Federal law

At federal level, applicable laws include the following:

  1. the Internal Revenue Code (Code), and in many cases, the Employee Retirement Income Security Act of 1974 (ERISA);

  2. the Securities Act of 1933 (Securities Act);

  3. the Securities Exchange Act of 1934 (Exchange Act);

  4. the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank); and

  5. the Sarbanes-Oxley Act (SOX).

The Code prescribes rules governing:

  1. the amount and timing of the inclusion in income by an employee of executive compensation and other types of employee benefits, and the amount and timing of the corresponding employer deduction, if any; and

  2. the imposition of employment taxes in connection

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