Gaming CEOs traded salary for stocks. Their ‘gamble’ is set to pay off

 Two weeks ago, on December 18, 2020, I was quoted on the utility of corporate CEOs taking restricted stock units (RSUs) in lieu of cash bonuses, in an article, with the title above, published in the  Las Vegas Review-Journal.

The newspaper that published this article, Las Vegas Review-Journal is the largest circulating daily newspaper in Nevada and ranked as one of the top 25 newspapers in the United States by circulation. https://en.wikipedia.org/wiki/Las_Vegas_Review-Journal

The article was about casino company CEO compensation, and how a number of Las Vegas-based CEOs had reduced their salaries in exchange for RSUs amid the pandemic, with the reporter  wondering what their compensation might look like down the road.

In the course of our interview, I suggested a number of benefits from this exchange executive compensation strategy of a cash bonus exchanged for RSUs – both to benefit the executive personally but to benefit the company and company stakeholders, including the following:

• Deferral of taxation that would come from immediate payment of the bonus, and deferral of taxation on the unvested portion until vesting has later occurred.
• Leverage of the amount of bonus magnified by the growth potential of the RSU, still further enhanced by the current low value due to the pandemic
• Assurance of a future payout to the CEO by use of RSUs rather than options because RSUs after vesting always retain some value.  RSUs effectively have a floor on value. They can never go underwater and become worthless as often happens with stock options.
• Use of the extra RSUs / redemption strategy to minimize effective taxation as RSUs vest, where in this way the company would typically pay for or assist in payment of the taxation, and the executive is more willing to pay a portion of the taxes since vesting has occurred.
• The benefit to company morale from the “vote of confidence in the company’s future” by the CEO choosing company stock over cash.
• The potential cascading benefit to the company with current employees and future hires who are heartened by the example of the man or woman at the top choosing company equity over an immediate cash payout.
• Benefit to investors, alliance partners and other stakeholders by enhanced “alignment” of the CEO’s financial prospects tied to company growth.

To see this full article on CEO use of RSUs in the Las Vegas Review-Journal , go to LINK:

Gaming CEOs traded salary for stocks. Their ‘gamble’ is set to pay off.

 Or https://www.executiveemploymentattorney.com/wp-content/uploads/2021/01/Attorney-Rob-Adelson-in-Casino-CEOs-trade-bonuses-for-stock-Las-Vegas-Review-Journal.pdf

The business reporter who authored this article, Bailey Schultz, said she had found me and reached out to me after reading an earlier article I wrote on RSUs that was published in CEO World.  That article, published February 28, 2017, was entitled “The Advantage of RSUs in Your CEO Compensation Package.” 

My 2017 RSUs article, targeted toward CEOs, C-Suite executives and other senior level executives, discussing the benefits of RSUs as a key part and often the most important part of their compensation package.  The article discussed how RSUs are most useful in mature companies where the CEO or C-suite executive takes a position where stock has considerable value, but growth is still expected in the public company or perhaps an IPO or liquidity event is not far off or in a turnaround situation in a mature company where there is no assurance of appreciation and the CEO needs assurance of a floor in his or her equity value.   

As part of my overall discussion of RSUs, my 2017 article covered these topics –

• What are RSUs?  When are RSUs paid out? 
• How are RSUs taxed?   How do you pay the taxes that come due on RSUs?
• When are RSUs most useful?  When are RSUs least useful? 
• What sort of RSU package should a CEO or C-suite executive look for? 
• Key Terms to negotiate in RSU grants

To see my full article, go to LINK:   http://ceoworld.biz/2017/02/28/advantage-rsus-ceo-compensation-package/   or http://www.executiveemploymentattorney.com/articles-section/the-advantage-of-rsus-in-your-ceo-compensation-package/

It is my hope that this article will be of benefit to CEOs, C-level and senior executives who might benefit or whose companies might benefit from the use of RSUs as part of the executive compensation package. If you or any colleague of yours has a need in this area, please do reach out to me at rob@attorneyadelson.com.

Holiday Greetings 2020

 

This holiday card and photograph are used here with the permission of wild life photographer Jerry Acton who enjoys sharing the beauty of nature from his home in New York’s Southern Tier. www.jerryacton.com

All Best wishes to you and yours, for a joyous holiday season and
For success, prosperity, health and happiness,
In the coming year, 2021.

ROBERT A. ADELSON, ESQ.
Adelson & Associates, LLP
101 Federal Street, Suite 1900 ♦ Boston, MA 02110
(617) 204-5602 ♦ FAX:  (617) 204-5604
Email: rob@attorneyadelson.com
Blog: https://robadelson.wordpress.com/
Website: www.ExecutiveEmploymentAttorney.com
LinkedIn: https://www.linkedin.com/in/robert-adelson-b8a1557/
Twitter:  @AttorneyAdelson 

Two articles of mine, published since spring 2020, during the Covid-19/ coronavirus crisis, intended to aid executives facing issues related to the pandemic, that may interest you, are as follows:     

1. Working Remotely as a C-level Executive

Are you tempted by a C-level position in a company with great potential on the West Coast, in Texas or Upper Midwest, but don’t want to give up your home and uproot your family where you are living on the East Coast?  My article, published in October 2020, suggests negotiation strategies, in our new COVID world,  to build a comfort level with prospective employers, for those executives who would like to take up an executive employment opportunity as a remote CEO or C-level executive

• To see my CEOWorld magazine article, go to LINK:  https://ceoworld.biz/2020/10/02/working-remotely-as-a-c-level-executive-opportunities-and-considerations/    
• 
  
• Or my website at https://www.executiveemploymentattorney.com/working-remotely-as-a-c-level-executive-opportunities-and-considerations/
• 
  
• 2. How the Right Severance Triggers can protect against Changed Circumstances

Has a new employer cut your pay or reduced your duties due to COVID-19 disruptions to the company, or due to a non-COVID related loss of a key customer, loss of financing or other changed circumstances? My article published in May 2020, discusses how negotiating the right severance triggers in your job offer can protect you so you can move on and be made whole. 

To see my CEOWorld magazine article, go to LINK: https://ceoworld.biz/2020/05/27/triggering-executive-severance-to-protect-your-interests-in-case-of-covid-19-or-other-changed-circumstances/ 

Or on my website at https://www.executiveemploymentattorney.com/triggering-executive-severance-to-protect-your-interests-in-changed-circumstances/

Employment, Tax, Contracts and Business Law Services for
• CEOs, C-Level and Senior Executives
•  Early Stage Companies and Entrepreneurs
• Consultants and Service Providers

*The photo on this holiday card, that of a female bluebird, photographed by Jerry Acton, also graced the cover of Bluebird, Journal of the North American Bluebird Society 2009-2010 Winter edition – https://www.jerryacton.com/Galleries/Published-Photos/i-Swrj6NW   Once again, thank you to Jerry for sharing his fine work – making this wonderful winter wildlife image available for all of us to enjoy in this holiday season!

Negotiating a Custom CEO or C-level Executive Compensation Package

On November 5, 2020, CEOWorld magazine published an article I wrote on “Negotiating a Custom CEO or C-level Executive Compensation Package” . 

This new article is designed for  CEOs, C-level and senior executives, who are negotiating new job offers where the metrics of a routine Gartner or Mercer compensation survey are just not appropriate for that particular CEO or C-level executive compensation package, and the executive employment advisor is called upon to suggest, design and then lead the negotiations for a custom executive compensation package.

My article first suggests three situations well suited to justify development and deployment of a custom executive compensation package:

• Start-up and early stage company CEOs,
• Turnaround CEO situation, and
• Special needs executive recruitment – where a CEO or C-level executive has special attributes that fill a critical need for the company. 

My article then moves on to discuss that the custom package must not only make up for your loss of pay and benefits to leave your current employer, but even more so, to make up for three further critical intangibles as well, and hence – what should be included on your custom executive compensation package? And how much equity compensation should you ask for? 

The article then concludes with my suggestions for how the executive can achieve company “Buy-in” – how do you sell the custom CEO or C-level executive compensation package to an often skeptical employer?  This last part shares three of my best “sales” techniques:

• You (employer) want and need an “A” team player, this custom package will not only secure the services of a true A player but his or her successful recruitment  will help you to attract still more A team players to the company.
• You want alignment and this custom package greatly magnifies the alignment of this key executive hire with the growth goals of the company, and
• Success for my executive, even with this full custom package, means vastly greater success to the company’s stockholders, often 10x, 15x and even 20x pay back return for the company’s stockholders, if the CEO or C-level executive succeeds in his or her mission, and costs little or nothing if he or she does not succeed.

To see my full CEOWorld magazine. article, go to LINK:

https://ceoworld.biz/2020/11/05/negotiating-a-custom-ceo-or-c-level-executive-compensation-package/

 Or on my website at https://www.executiveemploymentattorney.com/negotiating-a-custom-ceo-or-c-level-executive-compensation-package/

This was my 31st article published in CEOWORLD over the last five years.  Previously, the editor advised that I can use “Featured in the CEOWOLRD magazine” and the CEOWORLD “Logo” on my website and add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field.  See https://ceoworld.biz/author/robert-adelson/

With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide.

It is my hope that this article will be of benefit to CEOs, C-level and senior executives who are considering job offers in situations where a custom executive compensation package is appropriate.  Feel free to tweet or share this article. If you or any colleague of yours has a need in this area, please do reach out to me at rob@attorneyadelson.com.

Working Remotely as a C-level Executive – Opportunities and Considerations

Last Thursday, on October 2, 2020, CEOWorld magazine published an article I wrote on “Working Remotely as a C-level Executive – Opportunities and Considerations.”

This new article is designed for designed for CEOs, C-level and senior executives, dealing with the negatives of the Covid-19/Coronavirus pandemic on many businesses  and executive employment situations, but also giving rise to new opportunities.

The article offers illustrations of how remote zoom meetings are aiding non-profit groups and client development, and then moves to how those same techniques are aiding C-level and senior executives conducting nation-wide job searches for new executive positions.

Then, my article suggests techniques to build a comfort level with prospective employers, for those executives who would like to take up an executive employment opportunity as a remote CEO or C-level executive, including the following negotiation strategies:

1. Negotiate initial consulting to get to lead to your next CEO job offer;
2. Negotiate for temporary relocation to build company comfort level;
3. Use hazards of air and distance travel to reduce on site presence even with temporary relocation;
4. Make executive compensation and equity concessions now to gain the remote position, with the expectation of being made whole in a later retention agreement;
5. Assure your remote contract provides requisite online connectivity and necessary tools to enable your remote operation.

To see my full CEOWorld magazine. article, go to LINK:

https://ceoworld.biz/2020/10/02/working-remotely-as-a-c-level-executive-opportunities-and-considerations/

 Or my website at https://www.executiveemploymentattorney.com/working-remotely-as-a-c-level-executive-opportunities-and-considerations/

This was my 30th article published in CEOWORLD over the last five years.  Previously, the editor advised that I can use “Featured in the CEOWOLRD magazine” and the CEOWORLD “Logo” on my website and add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field.  See https://ceoworld.biz/author/robert-adelson/

With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide.

https://www.linkedin.com/company/ceomagazine/

It is my hope that this article on the new COVID-19 inspired opportunities opening up across the US to CEOs, C-level and senior executives is timely and will be of benefit.   Hopefully, the topics I discuss including to conduct nationwide job searches, to interview and take positions in desired urban centers and also in more others locations, and to do all that without the need to even leave your home office or local satellite office, and finally, the chance to work remotely and effectively and to negotiate the right terms to secure this desired employment – will be of benefit to the CEO, C-level and senior executive clients I represent.  Feel free to tweet or share this article. If you or any colleague of yours has a need in this area, please do reach out to me.

Achieving Zero Taxation on Sale of Your Startup Equity

Last Thursday, on September 3, 2020, CEOWorld magazine published an article I wrote on “Achieving Zero Taxation on Sale of Your Startup Equity”. 

This new article is designed for CEOs, C-level and senior executives, who are considering taking a position in a startup or early stage company in life sciences, tech, e-commerce or another high growth area of the economy, where executive equity may comprise a major part of your compensation package.

My article discusses how taking equity in qualified small business stock may enable you to have zero Federal taxation on all or most of your appreciation on a sale of shares after 5 years.  That exclusion from tax applies to not only the Federal capital gains tax but also the net investment income tax and the alternative minimum tax (AMT), on appreciation up to $10 million or 10x your adjusted tax basis in the stock, whichever is greater.

The article also includes a number of important tips to qualify your shares for this tax exclusion on sale, including the following:

• Obtain stock not options – only actual stock issued will qualify as QSBS and start your holding period to qualify for tax free treatment;

• Making a Section 83(b) tax election for QSBS to eliminate ordinary income as well as capital gains tax,

• Assuring the business is qualified, including that the business is still under $50 million in gross assets when QSBS are issued to you, and

• Planning your roll-over if needed to meet the 5-year holding period even if you sell your shares within that period.

To see my full CEOWorld magazine. article, go to LINK:

https://ceoworld.biz/2020/09/03/achieving-zero-taxation-on-sale-of-your-startup-equity/

Or https://www.executiveemploymentattorney.com/achieving-zero-taxation-on-sale-of-your-startup-equity/

This was my 29th article published in CEOWORLD.  Previously, the editor advised that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website and add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field. For a library of my past article published by CEOWORLD, see https://ceoworld.biz/author/robert-adelson/

With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs,CTOs, COOs, CIOs, CTO/CSOs, senior management executives, business leaders, and high net worth individuals worldwide.

It is my hope that this article on eliminating taxation on all or most of the appreciation on early stage or high growth stock a CEO or other C-level or senior executive receives as part  of your executive compensation package may be of benefit to those currently or in the future negotiating their executive compensation and equity package, or renegotiating in a retention situation. If you or any colleague of yours has a need in this area, please do reach out to me at rob@attorneyadelson.com.

Knowing Your Competition and Establishing Your Market Niche to Set Your Startup Apart

This is an article of mine published on July 7, 2020, by CEO Refresher magazine. My article is currently featured on the first page of the magazine website — http://www.refresher.com/

This article of mine is directed toward entrepreneurs, founders and CEOs of small and early stage companies, seeking angel or VC investment or trying to recruit co-founders and first employees or contractors. In such circumstances, the interested parties would be looking to the founder’s or CEO’s competitive analysis and demonstrated knowledge and mastery of his or her target marketplace to set his or her startup apart, including the following:

• What market niche you intend to enter and can dominate
• Your plan for how your company will penetrate the target
• Identity of your chief competitors, both direct competitors and indirect competitors that could be substitutes for your product or service
• The value proposition that you offer that will enable you to overcome the normal tendency for no change
• Strengths of the competition and your plan to overcome those
• Weakness of your competitors and your plan to avoid those same weaknesses
• Barriers to entry you would seek to create to surmount new competition once you gain market traction

To read more, go to https://www.executiveemploymentattorney.com/knowing-your-competition-and-establishing-your-market-niche-to-set-your-startup-apart/

It is my hope that this article will be helpful to founders, entrepreneurs, C-level and other senior executives in companies I represent, particularly those in startup and early stage companies seeking to gain traction in their market to attract angel or VC investment or other partners for growth.

Triggering Executive Severance to Protect Your Interests in Case of COVID-19 or Other Changed Circumstances

Six days ago, on May 27, 2020, CEOWorld magazine published an article I wrote on “Triggering Executive Severance to Protect Your Interests in Case of COVID-19 or other Changed Circumstances”.  The magazine advised me that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website.

This was my 28th article published in CEOWORLD. Earlier this year, the editor advised that I can add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field.  See https://ceoworld.biz/author/robert-adelson/

This article, my most recent, published May 27th, is designed for CEOs, C-level and senior executives, especially those who, once on the job, may find that their chances for success become daunting because changed circumstances beyond their control.  For many such executives, the severe economic downturn arising in connection with the COVID-19/coronavirus crisis may cause great reductions in expected base, bonus, equity and LTI compensation and reduced duties and responsibilities as well.​

However, the article is not limited to COVID-19.  The article also discusses other circumstances where clients of the author have also experienced such negative effects, as result of dashed expectations, including where the executive accepted his or her job offer for a CEO, C-level or other senior executive position in reliance on any of these company actions:

• Keeping a major customer account,
• Retaining the services of a key man or woman executive,
• Keeping or achieving regulatory approval,
• Keeping or retaining a key source of funding,
• Company possessing the positive financial position represented to you, a position on which you can build for growth.

The article then concludes with proactive steps the executive can take in your executive employment and job offer negotiations to protect yourself in the event of such changed circumstances in the future.  This includes the crafting of severance terms with triggers tailored to your situation in the event of dashed expectations. Thus, the executive would have an executive contract that provides that if circumstances change, such that the job is no longer what you bargained for, you can move on to a new opportunity and still be made whole as you do so.

To see my full CEOWorld magazine. article, go to LINK:

https://ceoworld.biz/2020/05/27/triggering-executive-severance-to-protect-your-interests-in-case-of-covid-19-or-other-changed-circumstances/

Or on my website at https://www.executiveemploymentattorney.com/triggering-executive-severance-to-protect-your-interests-in-changed-circumstances/

With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, CSOs, senior management executives, business leaders, and high net worth individuals worldwide.

https://www.linkedin.com/company/ceomagazine/

The editor has also advised that I can add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field.  See https://ceoworld.biz/author/robert-adelson/

It is my hope that this article will be helpful to suggest a potential remedy in job offer negotiations to CEOs, COOs, CMOs, other C-Level and senior executives who are considering a new executive position or giving up other opportunities, and, acting in reliance on the promises made by the employer, and seek protection against potential changed circumstances, whether from a pandemic, loss of a key customer, loss of key personnel, a negative regulatory ruling, loss of financing  or otherwise, so the executive can if that happens move and be made whole. If you or any colleague of yours has a need in this area, please do reach out to me at rob@attorneyadelson.com.