Author: jfortenberry@fortenberrylaw.com

“Qwest workers’ retirement plummets”: Rocky Mountain News.com reports that an annual regulatory filing by Qwest reveals that both the Department of Labor and the Internal Revenue Service are examining Qwest’s 401(k) retirement savings plan. The plan is also the subject of employee lawsuits.

“Former Kmart execs want suit to be dismissed”: Gary Haber for the Detroit Free Press reports on the Motion to Dismiss heard yesterday by U.S. District Judge Avern Cohn in Detroit in the 401(k) class action lawsuit brought by Kmart employees.

Today’s Federal Register contains amendments to regulations relating to the requirement under section 274 of the Internal Revenue Code to substantiate business expenses for traveling while away from home and final regulations relating to controlled foreign partnerships.

The New York Times has this article by Mary Williams Walsh: “G.M. Profit Gets Lift From Pension Deal.”

On the SEC’s Announcement Yesterday:

Bloomberg News for the New York Times reports: “S.E.C. Passes Rule Changes for Options.”

Reuters provides this report: “Shareholders Must Vote on Stock-Based Pay.” The article discusses how “inducement awards” — or signing bonuses — for new executive hires, as well as some stock-based pay plans related to mergers and acquisitions and some pension plans, are exempted from the rules.

“Executive stock options limited”: the Sacramento Bee reports on how some are applauding the SEC’s action yesterday requiring shareholder approval for stock option plans, some are calling for more action, and some are saying the SEC’s action will hurt start-ups.

Amy Strahan Butler for Bloomberg News via the Seattle Times also reports: “Investors gain stock-option clout.” Under the NYSE’s new listing standards, brokers who hold securities on behalf of customers wouldn’t be allowed to vote on equity-compensation plans without instructions from the owners of those shares. The article reports that “[s]ome companies fought that provision, saying it would make it hard for them to get a quorum of shareholder voters since brokers have custody of most customer shares.” The article quotes Ann Yerger, deputy director of the Council of Institutional Investors, which represents funds managing a total of more than $2 trillion, as applauding the new rule for brokers since brokers “always vote for management” and this constitutes, she says, “stuffing the ballot box.”

“New Rules Require Shareholder Approval of Equity Compensation“: That’s the announcement of the Securities and Exchange Commission today which approved new rules proposed and adopted by the New York Stock Exchange and the Nasdaq Stock Market requiring shareholder approval of equity compensation plans, including stock option plans. The new rules will also require approval for repricings and material plan changes. Securities and Exchange Commission Chairman William H. Donaldson provided these comments today:

These rule changes are an important step by our nation’s principal markets. They have responded to the Commission’s call for an increased shareholder voice in the equity compensation practices of listed companies and I applaud them. These changes are part of a broad movement by our markets and the Commission to enhance the corporate governance practices of the companies traded on them. The New York Stock Exchange and the Nasdaq Stock Market have proposed additional listing standards to strengthen corporate governance, and the Commission looks forward to working with them to complete these efforts on behalf of investors and shareholders.

You can access the new rules here.

CorpLawBlog provides this discussion.

Gardner, Carton & Douglas provides this great article by Lisa Collins and Timothy Stanton: “All of a Sudden, a COBRA Deadlines Looms: New DOL rules will likely prompt widespread revisions of notices, provisions–soon.” (I love this article because the information in it is so practical and helpful to practitioners. Thanks to Gardner, Carton & Douglas for sharing their analysis with the rest of the world.)

The IRS recently issued Revenue Ruling 2003-83 which provides guidance on reasonable funding methods for pension plans. (Also, via Benefitslink here.)

Reuters via Lycos reports: “GM Opposes Pension Disclosure Changes.” The article quotes GM spokeswoman Toni Simonetti as saying: “The proposed new rule assumes you have one defined benefit plan. If you’re a multinational and you have several plans, it’s virtually impossible to comply with the (new) rule.”

Scott Burns reports here for the Houston Chronicle: “Bush tax cuts similar to printing more money.”