Executive Compensation Answer Book

by Overton, Bruce B.; Stoffer, Susan E.

• ISBN13: 9780735520943
• ISBN10: 0735520941
• Edition: 5th
• Format: Hardcover
• Copyright: 2001-12-01
• Publisher: Wolters Kluwer
• More Book Details
• Purchase Benefits

Summary

This complete source for proven, practical, executive compensation solutions draws on the authority of the best in the business - Bruce Overton, whose wealth of experience includes responsibility For The Ernst & Young national compensation consulting practice, and Susan E. Stoffer, a partner in the Compensation, Benefits and ERISA Litigation practice group of Kilpatrick Stockton. In a straightforward question-and-answer format, this dependable source of guidance shows you how to: Attract and retain top executive talent Create compensation plans that boost profitability, structure incentives for peak performance and strict compliance with regulations Keep up with regulatory, legal, and tax trends Design competitive executive compensation plans Monitor programs to boost the bottom line You get quick, authoritative answers to more than 800 questions on the full range of compensation issues.

Table of Contents

List of Questions	xxxi
Fundamental Concepts of Executive Compensation	1	(1)
Total Compensation Issues	2	(10)
Base Salary	12	(3)
Incentive Plans	15	(7)
Tax Considerations	22	(9)
Accounting Considerations	31
Building a Total Compensation Strategy	1	(1)
General Considerations	2	(1)
Factors Determining Total Compensation Strategy	3	(4)
Benefit Programs Addressed in Total Compensation Strategy Statement	7	(3)
Other Issues	10	(1)
Determining the Mix	11	(4)
Developing a Total Strategy	15	(1)
Approval and Implementation	16	(2)
Examples of Strategy Statements	18
Defining the Executive Job and Employment Terms	1	(1)
Executive Job Descriptions	2	(6)
Employment Terms	8	(7)
Executive Turnover	15
Identifying and Evaluating Executive Candidates	1	(1)
Sources of Executive Talent	1	(7)
Interviewing Executives	8	(6)
Employing the Executive	14
Base Salary	1	(1)
Establishing Base Salary	2	(2)
Salary Ranges and Salary Banding	4	(4)
Job Evaluation	8	(3)
Salary Increases	11
Annual Incentives	1	(1)
General Considerations	2	(11)
Plan Design	13	(14)
Performance Measures	27	(7)
Performance Standards	34	(3)
Funding Incentive Plans	37
Equity-Based Long-Term Incentive Plans	1	(1)
General Definitions and Considerations	2	(6)
Stock Option Purchase Plans	8	(31)
Stock Appreciation Rights	39	(8)
Full-Value Stock Award Plans	47	(8)
Plan Design and Administration Issues	55
Non-Equity-Based Long-Term Incentives	1	(1)
Overview	2	(1)
Performance Unit Plans	2	(3)
Formula Plans	5	(2)
Book Value Plans	7	(6)
Economic Profit Plans	13	(3)
Plan Comparisons	16	(2)
Plan Design	18
Executive Benefit Plans	1	(1)
General Considerations	2	(1)
Qualified Retirement Plans	3	(3)
Nonqualified Deferred Compensation Plans	6	(22)
Split-Dollar Life Insurance	28	(4)
Executive Disability Income Insurance	32	(2)
ERISA and SEC Considerations	34
Perquisites and Other Benefits	1	(1)
General Considerations	1	(1)
Types of Perquisites	2	(10)
Tax and Accounting Impact	12
Special Early Retirement Programs	1	(1)
Overview	2	(1)
Severance Programs	3	(1)
Planning Early Retirement Programs	4
Executive Contracts	1	(1)
General Considerations	1	(1)
Employment Contracts	2	(4)
Severance Contracts	6	(8)
Retirement Contracts	14
Small-Company Versus Large-Company Practices	1	(1)
General Considerations	2	(3)
Annual Incentives	5	(5)
Long-Term Plans	10	(7)
Benefits and Perquisites	17	(2)
Special Considerations for Small Companies	19	(4)
New Venture Businesses	23
Executive Compensation in the Not-for-Profit Organization	1	(1)
General Considerations	1	(4)
Base Salary	5	(1)
Annual Incentives	6	(2)
Long-Term Incentives	8	(1)
Benefits	8	(4)
Perquisites	12
Executive Compensation in the Public Sector	1	(1)
Philosophy	2	(1)
Base Salary	2	(5)
Annual and Long-Term Incentives	7	(1)
Benefits and Perquisites	8	(2)
Miscellaneous	10
Executive Compensation in High-Technology and Start-up Companies	1	(1)
Stock Options	1	(14)
Other Benefits	15
Compensation for Division Executives	1	(1)
General Considerations	1	(3)
Base Salary	4	(1)
Annual Incentives	4	(3)
Long-Term Incentives	7	(10)
Benefits and Perquisites	17
Compensation for Temporary Executives	1	(1)
General Considerations	2	(4)
Elements of Compensation	6	(3)
Federal Protection	9	(1)
Conversion to Full-Time Status	9	(1)
Recent Litigation	10
Executive Compensation Practices During a Restructuring	1	(1)
Overview	1	(12)
Base Salary	13	(4)
Short-Term Incentives	17	(5)
Long-Term Incentives	22	(4)
Benefits and Perquisites	26
Private Versus Public Companies	1	(1)
General Considerations	2	(2)
Stock-Based Plans	4	(3)
S Corporations	7	(4)
SEC Regulations	11	(8)
Proxy Rules	19
Compensation for Boards of Directors	1	(1)
General Considerations	2	(1)
Outside vs. Inside Directors	3	(3)
Compensation Methods	6	(4)
Benefits and Perquisites	10
U.S. Executives Working Overseas	1	(1)
General Considerations	2	(2)
Premiums and Allowances	4	(6)
Tax Considerations	10	(7)
Special Compensation	17	(9)
Foreign Law Considerations	26
Trends in Executive Compensation	1	(1)
Total Cash Compensation	1	(9)
Long-Term Compensation	10	(8)
Regulatory Issues	18	(8)
Outside Directors	26
Appendix A Executive Position Descriptions	1	(1)
Chairman of the Board	1	(1)
Chief Executive Officer	2	(1)
Top Operations Officer	2	(1)
Top Financial Officer	3	(1)
Top Human Resources Officer	4	(1)
Top Legal Officer	5	(1)
Top Information Technology Officer	6	(1)
Top Planning Officer	7	(1)
Top Public Relations Officer	8	(1)
Division or Strategic Business Unit Officer	9	(1)
Top Sales and Marketing Officer	10	(1)
Top Sales Officer	11	(1)
Top Marketing Officer	12	(1)
Controller	13	(1)
Top Tax Officer	14	(1)
Treasurer	15	(1)
Top Engineering Officer	16	(1)
Top Research and Development Officer	16	(1)
Top Distribution Officer	17	(1)
Top International Officer	18
Appendix B Sample Employment and Severance Agreements	1	(1)
Sample 1: Employment Agreement	2	(9)
Sample 2: Employment Agreement	11	(10)
Sample 3: Employment Agreement	21	(20)
Sample 4: Severance Agreement	41
Appendix C Sample Short-Term Incentive Plan	1	(1)
Pitney Bowes Office Systems Inc. Key Employees' Incentive Plan	1	(1)
Appendix D Sample Long-Term Incentive Plans	1	(1)
Certegy Inc. 2001 Key Management Long-Term Incentive Plan	1	(10)
Medgenesis Inc. 2000 Long-Term Incentive Plan	11
Appendix E Sample Equity Compensation Plans	1	(1)
Sample 1: Equity Compensation Performance Bonus Plan	1	(9)
Sample 2: Stock Award Plan	10	(16)
Sample 3: Stock Option Plan	26	(8)
Sample 4: Stock Option Exchange Program	34
Appendix F Sample Stock Purchase Plan	1	(1)
Time Warner Telecom 2000 Qualified Stock Purchase Plan	1	(1)
Appendix G Sample Economic Value-Added Bonus Plan	1	(1)
Eli Lilly and Company EVA Bonus Plan	1	(1)
Appendix H Sample Supplemental Executive Retirement Plans	1	(1)
Avaya---Supplemental Pension Plan	1	(22)
Energizer Holdings, Inc. Deferred Compensation Plan	23	(21)
Energizer Holdings Inc. Supplemental Executive Retirement Plan	44
Appendix I IRS Model Rabbi Trust Arrangement	1	(1)
Revenue Procedure 92-64, 1992-2 CB 422---Rabbi Trust Arrangements	1	(16)
Revenue Procedure 92-65, 1992-2 CB 428---Rulings on Unfunded Deferred Compensation Arrangements	17
Appendix J Sample Change-of-Control Agreement	1	(1)
Change-of-Control Agreement	1	(1)
Appendix K Sample Deferred Compensation Plan for Nonprofit Organization	1	(1)
Sample 457(f) Ineligible Deferred Compensation Plan	1	(1)
Appendix L Sample Proxy Disclosures	1	(1)
AOL Time Warner Inc. Executive Compensation	1	(21)
Sprint Corporation 2001 Proxy Statement	22
Appendix M Sample Proposals to Increase the Number of Shares Used in an Executive Compensation Plan	1	(1)
Amazon.com Inc. 2000 Proxy Statement	1	(2)
Sprint Corporation 2001 Proxy Statement	3
Appendix N Sample Proposal to Approve Performance-Based Compensation Plan as Defined Under Code Section 162(m)	1	(1)
Del Monte Foods Company 2000 Proxy Statement	1	(1)
Appendix O Code Section 162(m): Recent IRS Rulings	1	(1)
Letter Ruling 200027012	1	(1)
Letter Ruling 9950021	1	(1)
Letter Ruling 9949014	2	(1)
Letter Ruling 9942012	2	(1)
Letter Ruling 9928015	2	(1)
Letter Ruling 9928014	3	(1)
Letter Ruling 9924007	3	(1)
Letter Ruling 9921032	4	(1)
Letter Ruling 9910011	4	(1)
Letter Ruling 9811029	4	(1)
Letter Ruling 9801043	5	(1)
Chief Counsel Advice 9926030	5
Appendix P Code Section 280G: Cases and IRS Rulings	1	(1)
Letter Rulings 200036024-200036027, 200036031, 200036032, 200036034, 200036035, and 200036037	1	(1)
Letter Ruling 9949009	2	(1)
Letter Ruling 9943032	2	(1)
Letter Rulings 9920009, 9915021	3	(1)
Letter Ruling 9905012	3	(1)
Letter Ruling 9822029	3	(1)
Letter Ruling 9610022	4	(1)
Hemingway v. United States, 81 F Supp 2d 1163 (CD Utah 1999)	4	(1)
Sullivan v. Easco Corp., 662 F Supp 1396 (D Md 1987)	5	(1)
Worth V. Huntington Bancshares, Inc., 43 Ohio St 3d 192, 540 NE 2d 249 (1989)	5	(1)
Cline v. Commissioner, 34 F 3d 480 (7th Cir 1994)	5
Appendix Q Sample Compensation Plans for Outside Directors	1	(1)
Viacom Inc. 2000 Stock Option Plan for Outside Directors	1	(7)
Rockwell Collins Inc. Directors Stock Plan	8
Appendix R Frequently Asked Questions About Stock Options	1	(1)
Index	1