The Treasury Department and IRS have issued proposed regulations on deferred compensation under Section 409A, which governs nonqualified deferred compensation to employees, directors or other service providers.
The NCEO's annual board elections will be held in January by e-mail. Board members serve for a three-year term and can run for reelection one time. Board members must attend the annual board meeting just prior to the annual conference and be available for periodic conference calls.
The Securities and Exchange Commission has rejected a proposal from Cisco Systems to value its options based on a market in employee options the company would create. Under the proposal, Cisco would create a new derivative security whose terms would be the same as its employee options.
On August 25, the IRS published REG-133578-05, proposed regulations that cover two ESOP dividend deduction scenarios. In the first, it said it would not allow companies to deduct the cost of repurchasing shares from departing employees.
Loren Rodgers, a long-time senior principal of Ownership Associates, has joined to the NCEO staff. Loren will be working on ownership culture, research, and ESOP issues.
The Senate Finance Committee has passed S. 219, the National Employee Savings and Trust Equity Guarantee Act ("NESTEG"). This wide-ranging bill covers a variety of areas of retirement law. A major provision covers the use of employer stock in retirement plans.
Two of the largest settlement agreements to date have been reached in employee class action suits concerning company stock in their 401(k) plans. Kmart agreed to a $115 million settlement with its employees over declines in its stock price.
Resolving some ambiguity, the Financial Accounting Standards Board, in a meeting with top accounting firms, has clarified that the grant date for purposes of equity award valuations is not the date the board decides on the option, but the date the grant is communicated to employees.
The Cost Accounting Standards Board has proposed new regulations on reimbursement for companies sponsoring ESOPs with federal contracts. The issue of what constitutes a reimbursable cost has been tossed back and forth between government regulators for about two decades.
Shell has agreed to pay $90 million to settle a class action lawsuit brought by employees who invested in company stock in their 401(k) plan. The settlement joins a growing list of out-of-court resolutions of class action cases brought over declining company stock prices.
