Business Startup

News Roundup 2012 Week 18: CEO salaries, Slow U.S. job growth, Facebook IPO valuation, United-Boeing deal

Executive Pay Packages Soar

GMI Ratings’ recent report details second consecutive year of double digit pay increases GMI Ratings released their 2012 Preliminary CEO Pay Survey that examines pay changes in the Russell Index and the S&P Index. The survey provides a look into the ten highest paid CEOs of 2012 and examines the executive pay packages. Some important highlights from the survey include a second consecutive year of double digit compensation increases at both the median and average level for the Russell 3000, with a median increase of about 15%. Three of the ten highest paid CEOs in 2012 are from the software industry. The highest paid CEO so far is Herbalife CEO Michael Johnson, earning nearly $90 million thus far....

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Business Startup

News Roundup 2012 Week 11: Securities Law, Employment Law, Executive Compensation

Securities Law

SEC Cracks Down on Sales of Private Securities The Securities and Exchange Commission has filed civil charges against three brokerage firms, Felix Investments, EB Financial, and SharesPost, that trade shares of privately held technology securities. According to the SEC, fund managers at Felix and EB Financial misled investors and took undisclosed fees and commissions. SharesPost, an online exchange for private shares, reportedly brokered transactions and failed to register as a broker-dealer. EB Financial settled for about $310,000, and SharesPost and its founder will pay about $100,000 combined. Meanwhile the SEC is progressing with a lawsuit against Felix and its manager. US legislators are considering adopting new laws that would make it easier to trade shares on the secondary markets.

Employment Law

CA...

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Business Startup

News Roundup 2012 Week Ten: Mergers & Acquisitions, Executive Compensation, Venture Capital, etc.

Mergers & Acquisitions

Nation’s Third Largest Proxy Advisor Withdraws Support of El-Paso Acquisition In last week’s news roundup we wrote about the Kinder Morgan Acquisition of the El-Paso Corporation, noting that Delaware judge Leo Strine begrudgingly refused to issue a preliminary injunction, which would have enjoined a shareholder vote on the matter. Now, Egan Jones Proxy Services, the nation’s third largest proxy adviser, has reversed its position on the sale. Previously Egan Jones was recommending that shareholders approve the acquisition, but after Chancellor Strine’s opinion, which noted Goldman Sach’s conflict of interest in the deal, Egan Jones is recommending that shareholders vote against the acquisition. However, the nation’s two largest proxy services continue to recommend to shareholders that they vote in favor of the acquisition.

Update: Calstrs...

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Business Startup

News Roundup 2012 Week Four: Apple, Executive Compensation, Online Privacy, Venture Capital

Apple in the News

Apple has huge quarter; launches revolutionary textbook platform; includes draconian terms in book publishers’ end user license agreement

Lots of Apple news this week. The technology giant posted its best quarter ever with revenues of $46.3 billion per quarter and a $13.87 net profit per share. The company sold 37 million iPhones and over 15 million iPads.

Apple also had exciting news about launching a new platform for textbooks. Apple has partnered with text book producers such as McGraw-Hill to make interactive textbooks for iPads. Textbooks in this format will be cheaper, easier to update, more environmentally friendly, and more portable. The interactivity and format will surely be a better and more exciting platform for those trying to learn...

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Business Startup

Incentive Stock Option Basics

If you’re looking for a way to incentivize employee performance in your company without having to hand out hefty salaries and bonuses, you may want to consider incentive stock options (ISOs). Often referred to as qualified (or statutory) stock options, ISOs are a type of employee stock option that provide employees with non-cash compensation in the form of stock options. Today’s post will examine some of the key features of ISOs, as well as the basic requirements to be a qualified ISO.

Tax Benefits of Using ISOs Perhaps the most significant benefit, especially from the employee’s perspective, of using ISOs is the tax benefit. An employee who exercises the option to purchase stock does not have to pay ordinary income tax on...

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Business Startup

News Roundup 2012 Week Two: Securities Regulations; Executive Compensation; SOPA Protests; Regional News; Koomey’s Law

Hedge Fund Managers Petition SEC to Remove Prohibition on General Solicitation Under current regulations, issuers of securities in private placements are restricted in how they can solicit potential investors. The Managed Funds Association has petitioned the SEC to eliminate the prohibition on general solicitation and advertising in Regulation D under the Securities Act of 1933 (“Securities Act”) for offerings or sales by private funds. In the petition the MFA points out that the regulations prohibiting general solicitation are vague, and argues that the uncertainty surrounding the vague rules is harmful to business. For an in-depth look at the petition check out Jim Hamilton’s blog.

Executive Compensation: Discovery Channel’s New CFO Gets Paid to Join and to Leave The Discovery Channel filed their 8-K...

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Corporate Finance & Securities

Say-On-Pay: An Overview, and An Update

An Overview The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law in August of 2010 included a requirement that publicly traded companies provide shareholders with a non-binding vote to approve executive compensation plans. These non-binding votes are commonly referred to as “say-on-pay” measures.

In accordance with Dodd-Frank, the SEC’s implementing rule, effective January 5, 2011, requires large corporations to provide their shareholders with non-binding resolutions to approve the compensation for named executive officers at least once every three years. Because the resolutions are non-binding, a vote rejecting executive compensation does not have any necessary consequence. However, failed say-on-pay measures get the attention of corporate boards, and recent studies demonstrate that the non-binding resolutions have practical consequences.

An Update – Causes...

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