Executive Compensation Update

The federal tax and securities law developments in the area of executive compensation over the past 12 months will have far-reaching consequences well beyond the next proxy season. As employers and practitioners struggle to comply with the most recent round of new efforts to reign in executive compensation, the widely publicized abuses involving the backdating of option grants, and potentially the backdating of option exercises, will only inspire a new round of public outcry and legislative initiative. Volumes of articles will undoubtedly be written on the many abuses that have paved the way to the current environment. This article, however, will focus on providing a summary of the recent significant tax and securities law developments that have affected or will affect executive compensation practices.