Cannabis Compensation #1

Fred WhittleseyConscious Compensation: The Impact Compensation Blog, Effective Equity: The Equity Compensation Blog, Pay and Performance: The Compensation Blog

From the Cannabis Compensation Consultant I did inhale.  I also held it in as long as I could to maximize the effects. Who would have thought that would ever intersect with my investing activity and commentary on executive compensation? (Full disclosure: I reside in the state of Washington where recreational cannabis is legal. We have a pot store just about … Read More

Stupid Compensation Plans – The Next Chapter

Fred WhittleseyConscious Compensation: The Impact Compensation Blog, Effective Equity: The Equity Compensation Blog, Pay and Performance: The Compensation Blog

I am not understanding how a prospective, not retroactive, reduction in corporate tax rates should result in boards of directors and executives thinking that this should justify a $1,000 bonus for every employee.  Whether you are an airline, or a bank, or neither an airline or a bank.  Nevermind pay-for-performance so that people about to be fired get the same as the … Read More

When is not vested equity not not vested?

Fred WhittleseyCompensation Expert Witness Blog, Effective Equity: The Equity Compensation Blog

  Takeaway: Broader legal concepts may override the technical details of performance-based equity grants. My 13-year-old daughter is learning in her 7th grade math class about computations with negative numbers.  This is one of the topics on the path from PEMDAS to Calculus that is predictably difficult for students.  (I coach elementary and middle school math students so I speak … Read More

Equity Compensation in Private Companies – Still Full of Landmines

Fred WhittleseyEffective Equity: The Equity Compensation Blog, Pay and Performance: The Compensation Blog

  A new report by Proskauer Rose LLP summarizes IPO activity in 2016 and includes some of the equity compensation problems that continue to dog these new companies.  For example, “66% of health care issuers received a cheap stock comment” from the SEC.  (Proskauer includes biotech and biopharma companies in the “health care” sector.) What the SEC calls “cheap stock” – equity … Read More

The Real Risk of Working at a Startup

Fred WhittleseyCompensation Expert Witness Blog, Conscious Compensation: The Impact Compensation Blog, Effective Equity: The Equity Compensation Blog

  When we think of working at a startup, we might imagine a lower base salary, no annual bonus, sparse benefits, and lots of equity – usually stock options.  Most realize that equity is a highly risky form of compensation and few startups ever make it to the IPO, another small number get acquired (at a much lower multiple than … Read More

Executive Compensation for Private Companies (sic)

Fred WhittleseyEffective Equity: The Equity Compensation Blog, Pay and Performance: The Compensation Blog

  Wikipedia says that: The Latin adverb sic (“thus”; “just as”; in full: sic erat scriptum, “thus was it written”) inserted after a quoted word or passage, indicates that the quoted matter has been transcribed exactly as found in the source text, complete with any erroneous or archaic spelling, surprising assertion, faulty reasoning, or other matter that might otherwise be taken as an error of transcription. I … Read More

Are We Paying CEOs All Wrong?

Fred WhittleseyEffective Equity: The Equity Compensation Blog, Pay and Performance: The Compensation Blog

  Last week’s article in Bloomberg Business Week “We’re Paying CEOs All Wrong” extended my work in Behavioral Economics and Equity Compensation to executive pay and then upward to CEO pay. I am flattered that the first two paragraphs of the article discussed my ideas although I thought it unnecessary to highlight that I have done this for “more than three decades” … Read More

Burn the ISS Burn Rate Table and Help Fix Income Inequality

Fred WhittleseyConscious Compensation: The Impact Compensation Blog, Effective Equity: The Equity Compensation Blog

“62 People Own As Much As Half of the Global Population” – that’s a catchy headline.  Maybe correct, maybe not, but likely conceptually correct.  An increasingly small number of people own an increasingly large proportion of the financial wealth in the world. I suspect that any of the compensation survey firms could perform a similar calculation about the collective compensation … Read More

What Equity Compensation Problem Are We Trying to Solve – ESPPs?

Fred WhittleseyEffective Equity: The Equity Compensation Blog

Equity Compensation Problems and Solutions Today I attended the NASPP Silicon Valley Chapter meeting to hear the presentation from Dr. John Hamman and Dr. Sebastian Goerg of Florida State University titled “Compensation Programs and their Behavioral Consequences”.  They did a nice job addressing a complex subject before an audience of people who often think of employee behavior and equity compensation … Read More

The Unreported Complexity of Pre-IPO Equity Compensation

Fred WhittleseyEffective Equity: The Equity Compensation Blog0 Comments

The headline this week in the Journal of Accountancy was “FASB share-based payments standard challenges private companies” reporting that the Financial Accounting Foundation  review of FAS123(R) concluded that everything is fine…almost.Of course, FAS123(R) is now ASC Topic 718 which I would have thought the Financial Accounting Foundation would be aware of. They conclude that the rules: Ensure that the cost of equity … Read More