Executive Compensation

The PCGC team has extensive experience representing public companies in all aspects of the planning, design, implementation, operation and termination of public company employee benefit plans and executive compensation arrangements, including securities, ERISA and tax considerations.

Our areas of expertise include:

  • retirement plans, including profit sharing and 401(k) plans, defined benefit and money purchase pension plans and Employee Stock Ownership Plans (ESOPs)
  • executive compensation programs such as non-qualified deferred compensation plans, performance-based incentive programs, equity-based arrangements
  • equity-based compensation plans, including design and documentation, stockholder approval and proxy materials and employee communications
  • incentive and non-statutory stock options
  • restricted stock and restricted stock units
  • stock appreciation rights
  • phantom stock
  • employee stock purchase plans
  • annual and long-term incentive plans
  • health and welfare plans, including insured and self-insured group health plans, disability and life insurance plans and cafeteria plans
  • transactional and litigation issues that arise in connection with benefit programs

Team Leader

Debra E. Kleman

Debbie Kleman works closely with executive management, boards of directors and compensation consultants with respect to executive compensation and employee benefits, including all types of equity based compensation arrangements, retirement plans and benefit issues in the mergers and acquisitions context.

Debbie has been chosen as one of Woodward/White’s Best Lawyers in America in Employee Benefits (ERISA) law since 2013.


Recent Articles

Tips for Seeking Shareholder Approval of Equity Benefit Plans

Most public companies regularly submit equity benefit plans to their shareholders for approval. As a general rule, both NYSE and Nasdaq require that every new benefit plan, and any material amendment to an existing plan, be approved by the shareholders if it offers equity to the company’s officers, directors, employees or consultants (subject to certain exceptions for retirement plans, plans acquired via acquisitions and “inducement awards” to newly hired employees). In addition, IRS Code Section 162(m) generally requires that an equity plan be approved by shareholders not less than once every five years in order to avoid that section’s limit on deductibility of executive compensation. The SEC’s say-on-pay rules and the heightened scrutiny by institutional investors of executive compensation now make shareholder approval more of an adventure than it used to be. Therefore, if your company is considering whether to, or is required by rule to, request shareholder approval of an equity plan this proxy season, here are some tips for navigating that process: Plan ahead. It is surprising how often the decision to seek shareholder approval of a plan or a plan amendment is made at the eleventh hour of the proxy preparation process. Give yourself plenty of time to analyze the issues, map out and implement a strategy, and prepare and vet the necessary disclosures. If you haven’t already, it is not too soon to begin that process. Pay attention, but don’t over-react, to proxy advisor standards. The fact is that, though they continue to be important players in this arena, ISS and Glass Lewis now have noticeably less influence on the vote of institutional investors (particularly...  Read More

Limits on 401(k) Plan Brokerage Windows

Many companies have recently modified their 401(k) plans to add a “brokerage window,” sometimes also known as a “self-directed account” or “self-directed brokerage account.” Rather than limiting participants to specified investment options (which may or may not include the employer’s own stock), plans with brokerage windows offer participants the ability to trade most of the listed stocks, mutual funds and exchange-traded funds within a brokerage’s offering. Leaving aside whether this level of investment freedom is advisable for many retirement plan participants, employers must consider the Securities Act implications of providing such an option. Companies that allow employees to purchase employer stock through their 401(k) plans are already well aware of the securities law requirements and restrictions related to that plan feature. However, what if a plan with no employer stock investment alternative is modified to include a brokerage window that does not prohibit employee contributions from being invested in employer stock? Could this constitute an offer of employer stock requiring Securities Act registration? While this might seem like a stretch, the SEC previously addressed analogous concerns in the context of employee stock purchase plans. A new CDI 139.33 from the Division of Corporation Finance now provides guidance on exactly this issue regarding 401(k) plans by referring back to its long-standing ESPP guidance. The answer, says the staff, depends on the extent of the employer company’s involvement in the brokerage window investment option. The concern is whether there is an “attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security, for value” within the meaning of Securities Act Section 2(a)(3)...  Read More

The SEC Nixes Contractual Waivers of Whistleblower Recoveries

In April 2015, the SEC announced in a first-of-its-kind enforcement action that certain KBR, Inc. confidentiality agreements violated the whistleblower protections of the Dodd-Frank Act by requiring employees and former employees to first notify the company of a potential violation before contacting the SEC. (See this Doug’s Note.) In the past two weeks, the staff went a step further by bringing enforcement actions against BlueLinx Holdings, Inc. and against Health Net, Inc. for their respective requirements that departing employees contractually waive their rights to future whistleblower monetary recoveries. What happened… The SEC found that both BlueLinx and Health Net entered into agreements with departing employees that violated Rule 21F-17(a) under the Securities Exchange Act, which provides that: “No person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement….” Several provisions in various BlueLinx agreements were called into question, including the following: “[The Employee shall not] disclose to any person or entity not expressly authorized by the Company any Confidential Information or Trade Secrets….Anything herein to the contrary notwithstanding, you shall not be restricted from disclosing or using Confidential Information or Trade Secrets that are required to be disclosed by law, court or other legal process; provided, however, that in the event disclosure is required by law, you shall provide the Company’s Legal Department with prompt written notice of such requirement in time to permit the Company to seek an appropriate protective order or other similar protection prior to any such disclosure by you (emphasis added).” and “Employee further...  Read More
Representative Projects
  • Prepared multiple equity compensation plans for a FORTUNE 300 company, ranging from broad-based employee stock purchase plans to stock incentive plans for key employees to incentive stock programs for outside directors
  • Prepared comprehensive HIPAA privacy and security documentation for numerous clients
  • Obtained summary judgment on behalf of plan administrator and employer in lawsuit challenging the reduction of long-term disability payments to recoup overpayments that occurred because of plaintiff’s unreported receipt of Social Security disability payments
  • Advised a publicly-traded company on its Section 162 (m) bonus plan and “plan within a plan” structures
  • Drafted a complex non-qualified deferred conpensation plan for a public company’s key employees and directors, assisted with the associated rabbi trust and related securities filings