In general, all listed companies must maintain a written claw back policy for the recoupment of certain compensation awarded to executive officers. Some of the specific terms of the executive summary include:

• The claw back policy is triggered when an accounting restatement corrects a material error in a previous financial statement
• The policy applies to incentive-based compensation granted within the preceding three years of the accounting restatement
• Fault or lack thereof is irrelevant to the implementation of the clause

Under the proposal, the claw back clause must contain the following elements:

• Description of the specific type of restatement that triggers the claw back clause;
• Definition of what “incentive-based compensation” is subject to recovery under the claw back clause;
• Statement of the specific time period covered in relation to when the compensation was received by the executive officer;
• Explanation regarding who is covered under the clause;
• Explanation about the amount of recovery authorized under the clause; and
• Statement that recoupment is mandatory unless it is “impracticable.” meaning that the cost of recovering exceeds the total amount of recovered compensation.

For questions about this proposed regulation and possible implications for your company, contact our office to speak with an attorney.

In 2011, the highest earning executive at Fannie Mae reportedly made $5.3 million, while Freddie Mac’s top executive earned $3.8 million. In 2012, the former FHFA director substantially decreased their annual pay to $600,000.

The argument for increases

According to Watt, salary increases will help attract top talent to opportunities with Freddie Mac and Fannie Mae, as well as retain these individuals as employees. He is reportedly allowing Freddie Mac executives to submit a report regarding desired increases for CEO salaries.

The argument against increases

In response to Watt’s consideration of the issue, Royce responded, “I’m deeply disappointed with Director Watt’s decision to open the door to multi-million dollar salaries at the GSEs, which continue to be propped up by tax payers.”

Under Royce’s legislation, the CEO salaries could reportedly decrease to around $200,000. He is joined in his opposition to the increases by other members of Congress, as well as the Treasury Department.  Fannie Mae and Freddie Mac are currently under a government conservatorship, which was formed under the 2008 bailout, where the two companies received a combined total of $187 billion. At that time, they were placed under the supervision of the FHFA.

If you have questions about your salary or this proposed legislation, contact our office to speak with a trained attorney.

The U.S. Department of Labor is reviewing new legislation to change overtime salary limits.

Right now, exempt executive, admin, and professional workers must earn at least $455 per week. This minimum lets employers skip overtime pay. But this may soon change. U.S. Department of Labor wants to raise the weekly salary floor in stages.

The plan may look like this:

• Week salary minimum rises to $1,090
• Salary will double for exempt job types
• Overtime must be paid if salary falls below the limit

This rise may roll out over 3 years. Employers won’t be able to avoid overtime rules unless they meet the new minimum pay level.

Changes for Highly-Compensated Workers

The legislation also affects highly-paid roles.

The yearly salary exemption may rise to $125,000. This shifts from the current $100,000. The new limit may also adjust for inflation in the future. This keeps the floor updated over time.

Who Is Affected by This Legislation?

The proposal targets these job groups:

• Executive employees
• Administrative employees
• Professional employees
• Highly‑compensated employees

If these workers earn below the new minimum, then overtime rules will apply. Employers must pay extra hours worked over 40 per week.

If you have any questions about the legislation or any other overtime questions, contact us today.

If you have any other questions surrounding executive compensation, check out our FAQs page or contact us today.

If you would like to speak with one of our attorneys about any questions or concerns you may have, please contact us today.

International Shareholder Services Inc. updated how it calculates the Relative Degree of Alignment (RDA). RDA measures CEO pay and performance against peer companies. The 2014 policy now compares 3-year total shareholder return (TSR) rank to 3-year total CEO pay rank within the same peer group. The update aims to make pay scoring clearer and more stable.

Old vs New RDA Calculation Method

• Old method: Used 1-year and 3-year TSR vs pay ranks, weighted 40% and 60%.
• New method: Uses only 3-year TSR vs pay rank for a smoother, simpler score.
  The core comparison remains the same. The biggest change is removing the 1-year scoring weight.

Why This Update Matters

The update supports a growing shift toward long-term rewards. It reduces focus on short results. It encourages companies to align CEO pay with durable peer performance. Many experts say steady metrics build better investor trust. Long-term incentives also lower pay volatility. Companies that reward lasting wins show stronger governance signals.

Agreement and Effective Date

The 2014 U.S. policy changes were approved on November 21, 2013. They applied to shareholder meetings from February 1, 2014 onward. This includes proxy review, pay alignment scoring, and investor vote guidance. The rules continue to influence executive compensation debates linked to shareholder value.

In Chao v. Hotel Oasis, Inc., the First Circuit Court of Appeals held the president of a corporation personally liable for the corporation’s FLSA violations. Prior to imposing personal liability, however, the Court determined that it is necessary to undergo a personally liability analysis to consider whether the corporate officer was “principally in charge of directing employment practices, such as hiring and firing employees…thus instrumental in “causing” the corporation to violate the FLSA.”

This has long been the rule in Massachusetts, where the Wage Act names the President and Treasurer as having personal liability for non-payment of wages. Now it appears there’s similar liability under Federal law, too.

The ruling is important for employees of companies where executives attempt to use bankruptcy threats to deprive employees of wages. Now, they are personally liable, too.

From the interview:

Armstrong: “Can you explain what this new wage and labor bill sets out to do?”

Gordon: “The bill puts the teeth back into a 1993 law protecting wages that was the subject of a controversial decision by our state supreme court last summer. The bill requires employers who skip payroll to pay those employees 3 times the amount of the missed wages. The problem is that when employees miss their wages, they have tough decisions to make about paying rent or mortgage, medical care, taxes, food, tuition. The idea is not to punish employers for missing payroll, just to compensate employees for their suffering.”

Armstrong: “What types of compensation does it cover?”

Gordon: “It covers wages. That’s really just about anything an employee earns – hourly pay, salary, commissions, bonuses, benefits, vacation, overtime.”

Armstrong: “What about employers that make an honest mistake?”

Gordon: “It’s tough to make a mistake with payroll. You hire the employees, you set their hours, you set their pay rate, and you know when payroll is due. If you take it seriously, how do you mess that up? But, let’s say you somehow missed a payroll. Most employees won’t file a lawsuit if you apologize and make it up. Keep in mind that to get the triple damages, the employee has to file a law suit.”