Executive Compensation

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On September 9, 2025, the Employee Benefits Security Administration (EBSA) issued Advisory Opinion 2025-03A to Morgan Stanley Smith Barney LLC (Morgan) regarding the status of its Deferred Incentive Compensation Plan (Plan) which is at issue in several cases being arbitrated and litigated. EBSA opined that the Plan is not a “pension benefit plan” as defined…

On July 17, the United States Court of Appeals for the Sixth Circuit upheld the district court’s dismissal of claims brought by former manager-executives of Ruby Tuesday, Inc. (Ruby), seeking recovery of lost benefits from the trustee of the rabbi trust that held the assets of two top hat plans, Regions Bank (Regions), after Ruby…

On July 4, President Trump signed his tax and spending bill known as the One Big, Beautiful, Bill Act (OBBA). From my perspective, one of the most important things that makes OBBA beautiful is what it doesn’t do. It doesn’t make changes to retirement plans or deferred compensation. That said, a change it does make…

Under Internal Revenue Code section 83(b), taxpayers who receive property, such as stock, in exchange for services that is subject to forfeiture, or is unvested for a certain period, may elect to pay income tax on the fair market value of the property as if it were not subject to forfeiture, or fully vested, in…

As reported in my previous article, Court Grants Preliminary Injunction Against FTC Ban on Non-Compete Agreements, the District Court granting the preliminary injunction from the FTC enforcing its ban on non-compete agreements limited the relief to only the plaintiff bringing the case, Ryan LLC, and not all business nationwide. I predicted that the Plaintiff…

As I wrote in April, a lawsuit filed by Ryan, LLC in the United States District Court for the Northern District of Texas, challenged the recently adopted Federal Trade Commission’s (FTC) rule making most non-compete agreements unenforceable (Rule). See FTC’s Non-Compete Rule Affecting Executive Compensation Challenged in Courts. On July 3, 2024, the court…

On April 23, 2024 the Federal Trade Commission (FTC) issued its final rule that prohibits most non-compete clauses. The rule is effective 120 days after its publishing in the Federal Register (scheduled for May 7). However, lawsuits challenging the rule have already been filed.

Prohibition on Non-Compete Clauses.

Clauses preventing employees, especially higher-paid executives…

Several studies continue to show the importance of nonqualified deferred compensation (NQDC) plans to attract and retain executive level talent for employers. See Study Shows The Need For Nonqualified Plans To Attract And Retain Talent. SECURE 2.0 also contains a provision that may encourage the use of NQDC plans. It provides that after 2023…

A new survey conducted by Newport Group and PLANSPONSOR shows a dramatic increase in the use of nonqualified deferred compensation (NQDC) plans to retain and attract executives.  Of 350 organizations offering NQDC plans, 42% said that was the reason for offering them.  This is up from 26% in the 2020 survey.  The survey also found…

This is the third and final installment of the effects of Covid-19 Pandemic (Pandemic) on executive compensation of private companies.  Part 1 discussed the issues of reducing compensation of Executives.  See Part 1.   Part 2 discussed issues with deferred compensation plans of Executives.  See Part 2.  This Part 3 deals with limits on…