Stock-based executive pay plans offer choices
Article Abstract:
Companies are introducing stock and stock-based compensation schemes in view of the fact that connecting executive pay to employers' performance can attract, motivate and retain highly desirable employees. Traditional stock plans include incentive stock options, nonqualified stock options or non-incentive stock options, restricted stock and performance shares, and stock appreciation rights. Employers can also reward executive and management employees based on stock appreciation through other less popular arrangements. These include phantom stock, stock purchase program, deferred compensation and employee stock ownership plan. Companies should remember that nonqualified plans steer clear of typical restrictions on qualified plans but may be affected by other special tax rules.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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Finding the best compensation plans for key executives
Article Abstract:
A compensation plan for key corporate executives must address the needs of both the employer and the executive-employees. Three factors necessitate such a plan with balanced solutions for addressing the needs of both parties: the effects of taxation, the Employee Retirement Income Security Act of 1974, and federal restrictions on securities. Thus, consideration of these three factors ensures the development of compensation plans that will best serve the interests of both the employer and the employee. The same factors should also be considered in planning and implementing specific components of a compensation scheme, including bonuses, insurance contracts, annuities, and rabii and secular trusts.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1992
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Rewarding executives with stock and stock-value arrangements
Article Abstract:
Executive compensation packages frequently involve stock arrangements such as golden parachutes, phantom stock, stock appreciation rights and stock options. A key objective of compensation managers planning such stock arrangements is to ensure that the executive compensation package provided is effective in enhancing executive loyalty and performance, while providing maximal executive compensation and minimal tax consequences for the company. Compensation managers also need to take into consideration SEC and ERISA regulations when planning this type of executive compensation package.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1992
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