The proposal, first announced by the Chancellor George Osborne in October, originally referred to "employee owner" status. In essence, the idea is that employees would give up certain employment rights, such as unfair dismissal and statutory redundancy pay, in return for between £2,000 and £50,000 of shares in the company which would be exempt from capital gains tax (CGT). Employers could determine the type of shares offered, including whether they carry voting rights or the right to receive dividends.Continue Reading...
By Colin Leckey
The High Court has upheld a claim by 104 investment bankers for unpaid bonuses totalling EUR 52 million (Attrill and others v Dresdner Kleinwort and Commerzbank). The claim was based on verbal promises as to the size of a bonus pool which were found to have contractual effect.
The judgment, though lengthy, is at heart a straightforward breach of contract claim. It is very fact-specific, and care should be taken not to read too much into its broader implications.
Nevertheless, it serves as a salutary warning to staff involved in the annual compensation process in banks and other financial services institutions - from the CEO and the board down - of the need to exercise caution in the nature and content of communications about bonus pools and individual awards. Failure to do so may mean that binding commitments, later regretted, come into effect.Continue Reading...
On November 15, 2011, the Canadian Association of Pension Supervisory Authorities (CAPSA) released two Guidelines on pension plan governance. These Guidelines outline the expectations relating to the investment of pension plan assets, as well as best practices when developing and adopting a funding policy for pension plans that provide defined benefits.
Guideline No. 6: Pension Plan Investment Practices Guideline provides a variety of prudent investment principles that plan administrators should bear in mind when managing investments. In this Guideline, CAPSA encourages plan administrators to assess their current investment practices to ensure prudent practices are in place. The focus of the Guideline is to ensure that plan administrators have a robust, process-oriented decision-making framework in place within which investment management activities are conducted.Continue Reading...
We are pleased to announce a new addition to Littler's blogroll:
- Legislative and regulatory developments in the employee benefits arena, including the topics of health care reform; plan design and administration; employee benefits litigation; and
- Executive compensation, providing insight and analysis on legal developments that warrant discussion.
During this time of significant governmental change and shifts in the strategy and style of benefits litigation, Littler's depth of experience in employee benefits, litigation, and executive compensation matters gives our attorneys a distinctly broad perspective with which to provide insight and useful analysis of the latest developments. To subscribe to receive email alerts of new blog posts, please enter your email address in the Subscribe box on the right side of the Employee Benefits Counsel blog homepage.
Photo credit: IdeaBug Media
The law passed on July 28th, 2011 requires all French companies and groups of companies whose holding company is in France, to pay a bonus to employees if they distribute a dividend to their shareholders, which is higher than the average of the dividends of the two previous years. The amount of the bonus is to be negotiated with the unions. If these negotiations are not successful, the employer can unilaterally decide the amount. For 2011, companies had until October 31st, 2011 to come into compliance. The bonus is exempt from social security contributions up to 1200 euros. According to preliminary surveys, the amount proposed by companies is mostly between 150 and 500 euros.
Directive 2010/76 (the so-called CRD III) was due for implementation in national laws of the EU Member States by 1 January 2011. Poland has missed the deadline. CRD III provides new guidelines for remuneration policies in credit institutions. It primarily refers to variable components of remuneration, i.e., bonuses. According to its provisions, no less than 50% of variable remuneration must be composed of shares or similar instruments and at least 40% should be deferred in time. In the event of the occurrence of subdued or negative financial performance, a reduction or even clawback of bonuses paid should be possible.
As already known, the social partners did not succeed in concluding an inter-professional agreement for 2011-2012. In recent years, they always succeeded in doing so and thus fixed an indicative margin determining how remuneration costs could change in the two years subsequent to finalizing their agreement. Industry branches and afterwards companies could then proceed to remuneration negotiations within this margin. The margin was indicative, not binding.
In the absence of such agreement and after a Government attempt to mediate, the King can, by law, fix the maximum margin for changes in remuneration costs, by a Royal Decree which has been discussed in the Cabinet. Such a Royal Decree has now been published and this time the maximum margin is binding rather than indicative. This has far-reaching legal consequences.Continue Reading...
The Banking, Finance and Insurance Commission (CBFA) has published a new regulation relating to the remuneration policies in financial institutions. This regulation implements the CEBS guidelines on remuneration policies and practices aimed at facilitating the implementation of European Directive 2010/76/EU (CRD III). This regulation applies to remuneration policies implemented in credit institutions, investment firms, liquidation bodies, and similar entities.
The primary objective of the text is to ensure the alignment of personal objectives of workers whose function has a significant impact on the risk profile of the institution with the long-term collective objectives of the institution concerned, notably through an evaluation of the performance realized in a multi-annual framework.Continue Reading...
The Regulations phasing out the default retirement age (DRA) - the UK law that allows employees to be retired compulsorily at or over the age of 65 - have been finalised and put before Parliament.
In essence, the new Regulations remove the exceptions that currently say it is not age discrimination to retire someone and that retirement in itself is a potentially fair reason for dismissal. However, there are some intricate transitional provisions (explained below).
The Regulations (coming into force on 6 April 2011) will delete the statutory provisions which currently say that it is not age discrimination:
- to dismiss someone at or over age 65 if the reason is retirement; or
- to refuse to offer someone employment who will reach retirement age within six months' time.