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  • 1.

    Overview
    Provide an overview of the primary sources of law, regulation and practice that govern or affect executive compensation arrangements or employee benefits.

  • 2.

    Enforcers
    What are the primary government agencies or other entities responsible for enforcing these rules?

  • 3.

    Governance requirements and shareholder approval
    Are any types of compensation or benefits generally subject to specific corporate governance requirements or approval by shareholders or government agencies? What is the general process for obtaining approval?

  • 4.

    Consultation
    Under what circumstances does the establishment or change of an executive compensation or benefit arrangement generally require consultation with a union, works council or similar body?

  • 5.

    Prohibited arrangements
    Are any types of compensation or benefit arrangements prohibited either generally or with respect to senior management?

  • 6.

    Rules for non-executives
    What rules apply to compensation and benefits of non-executive directors?

  • 7.

    Mandatory disclosure of executive compensation
    Must any aspects of an executive’s compensation be publicly disclosed or disclosed to the government? How?

  • 8.

    Common provisions
    Are employment agreements required or prevalent? If so, what provisions are common? Are any terms prohibited or unenforceable?

  • 9.

    Typical structures
    What are the prevalent types and structures of incentive compensation? Do they vary by level or type of organisation?

  • 10.

    Restrictions
    Are there limits generally on the amount or structure of incentive compensation? Are there limits that adversely affect the tax treatment of the compensation relative to the employer or the executive?

  • 11.

    Deferral
    Is deferral and vesting of incentive awards permissible? Are there limits on the length or type of vesting and deferral provisions?

  • 12.


    Are there limitations on the individuals or groups eligible to receive the compensation? Are there aspects of the arrangement that can only be extended to certain groups of employees?

  • 13.

    Recurrent discretionary incentives
    Can it be held that recurrent discretionary incentive compensation has become a mandatory contractual entitlement? Is this rebuttable?

  • 14.

    Effect on other employees
    Does the type or amount of incentive compensation awarded to an executive potentially affect the compensation that must be awarded to other executives or employees?

  • 15.

    Mandatory payment
    Is it permissible to require repayment of incentive compensation under certain circumstances? Are there circumstances under which such repayment is mandatory?

  • 16.


    Can an arrangement provide that payment is conditioned on continuing employment until the payment date? Are there exceptions?

  • 17.

    Typical forms
    What are the prevalent forms of equity compensation awards in your jurisdiction? What is a typical vesting period? Must the arrangements be offered to a broad group of employees, or can the employer select the participants?

  • 18.


    Must equity-based compensation be granted by the company’s board of directors (or its committee) or can the authority be delegated to officers or employees of the company? Are there limitations or requirements that apply to delegation?

  • 19.

    Tax treatment
    Are there forms of equity compensation that are tax-advantageous or disadvantageous to employees or employers?

  • 20.

    Registration
    Does equity-based compensation require registration or notice? Are exemptions, or simplified or expedited procedures available?

  • 21.

    Withholding tax
    Are there tax withholding requirements for equity-based awards?

  • 22.

    Inter-company chargeback
    Are inter-company chargeback agreements between a non-local parent company and local affiliate common? What issues arise?

  • 23.

    Stock purchase plans
    Are employee stock purchase plans prevalent or available? If so, are there any frequently encountered issues with such arrangements?

  • 24.

    Mandatory and voluntary employee benefits
    Are there any mandatory benefits? Are there limits on changing or discontinuing voluntary benefits that have been provided?

  • 25.

    Typical employee benefits and incentives
    What types of employee benefits are prevalent for executives? Are there tax or other financial incentives or disincentives for such employee benefit arrangements?

  • 26.

    Rules for termination
    Are there prohibitions on terminating executives? Are there required notice periods? May executives be dismissed without cause?

  • 27.

    Mandatory severance pay
    Are there statutory or mandatory minimum severance requirements? Are there any other mandatory, post-employment benefits?

  • 28.

    Typical severance pay
    What executive severance payment level is typical?

  • 29.

    Reasons for dismissal
    Are there limits on dismissal for ‘cause’? Are there any statutory limits on ‘constructive dismissal’ or ‘good reason’? How are ‘cause’ or ‘constructive dismissal’ defined? Are there legal or customary rules relating to effecting a termination for ‘cause’ or ‘constructive dismissal’?

  • 30.

    Gardening leave
    Are ‘gardening leave’ provisions typically used in employment terminations? Do they have any special effect on benefits?

  • 31.

    Waiver of claims
    Is a general waiver or release of claims on termination of an executive’s employment normally permitted? Are there any restrictions or requirements for the waiver or release to be enforceable?

  • 32.

    Typical covenants
    What post-employment restrictive covenants are prevalent? What are the typical restricted periods?

  • 33.

    Enforceability
    Are there limits on, or requirements for, post-employment restrictive covenants to be enforceable? Will a court typically modify a covenant to make it enforceable?

  • 34.

    Remedies for breach
    What remedies can the employer seek for breach of post-employment restrictive covenants?

  • 35.

    Required retirement benefits and incentives
    Are there any required pension or other retirement benefits? Are there limits on discontinuing or modifying voluntary benefits that have been provided?

  • 36.

    Typical retirement benefits and incentives
    What types of pension or other retirement benefits are prevalent for executives? Are there tax or other financial incentives or disincentives for such employee benefit arrangements?

  • 37.

    Supplemental retirement benefits
    May executives receive supplemental retirement benefits?

  • 38.

    Directors and officers
    May an executive be indemnified or insured for claims related to actions taken as an executive, officer or director?

  • 39.

    Transfer of benefits
    Under what circumstances will an asset sale in your jurisdiction result in an automatic transfer of benefit obligations to the acquirer?

  • 40.

    Executive retention
    Is it customary to provide for executive retention or related arrangements in connection with a change in control?

  • 41.

    Expedited vesting of compensation
    Are there limits or prohibitions on the acceleration of vesting or exercisability of compensation in a change in control? Are there restrictions on ‘cashing-out’ equity awards?

  • 42.


    Are there adverse tax consequences for the employer or the executive relating to benefits or payments provided pursuant to a change in control?

  • 43.

    Exchange controls
    Do foreign exchange controls rules apply to the remittance of funds, or the transfer of employer equity or equity-based awards to executives?

  • 44.

    Local language requirement
    Must employment agreements, employee compensation or benefit plans, or award agreements be translated into the local language?

  • 45.

    Net salary arrangements
    Are there prohibitions on tax gross-up, tax indemnity or tax equalisation payments?

  • 46.

    Choice of law
    Are choice-of-law provisions in executive employment contracts generally respected?

  • Updates and trends

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