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John R. Ellerman

partner | Dallas 214-387-3179

Expertise

John R. Ellerman is a Partner based in the Dallas office of Pay Governance. John is an active consultant who advises the compensation committees of Fortune 500 companies. Several of these clients have been served by John for 15 years or more. John's clients are principally in the energy services sector; however, he also has clients and relevant experience in the retailing, high technology, general manufacturing, casual dining, and financial services industry.

Previous Experience

Prior to joining Pay Governance, John was the managing partner in the executive compensation practice for Towers Watson (formerly Towers Perrin). For the last 15 years, John was the practice leader for that firm's executive compensation and rewards practice for the U.S. Western region.

Additional Information

John is a noted speaker on executive compensation and has presented to The Conference Board, WorldatWork, the Directors College of Corporate Governance, and other prominent groups. He was a contributing author of Marking Mergers Work: The Strategic Importance of People. John is often quoted in the business press and has been cited in The Wall Street Journal and other major newspapers.

In addition, John has held an appointment to the Division of Sponsored Research at M.I.T. After completing his academic pursuits and before entering the consulting profession, John served two years in the Department of Defense as a systems analyst.

Education

John has both BBA and MBA degrees from Stetson University.


Other Posts by

California Legislates Gender Diversity in the Corporate Boardroom

During the last week of September 2018, Governor Jerry Brown signed a law mandating public companies headquartered in California must have at least one female member on their board of directors by December 31, 2019. Further, companies with less than six members on the board will be required to have at least two female directors by the end of 2021, and companies with six or more directors will be required to have at least three female directors by the end of 2021. The legislation, referred to as SB-826, is in direct response to legislators and regulators who have found women to be underrepresented on public company boards. The Board of Governance Research LLC, in a 2017 study of Russell 3000 companies headquartered in California, found that more than 25 percent of the 441 reported companies had no female directors. Continue reading

SEC Takes Back Comfort Letters Provided to Two Proxy Advisory Firms

In 2004, the Securities and Exchange Commission’s (SEC) Division of Investment Management issued letters to two proxy advisory firms, Egan-Jones Proxy Services and Institutional Shareholder Services (ISS), that assured mutual fund managers they could rely on the vote recommendations of the two firms. On September 13, 2018, the SEC Investment Management staff decided to rescind the two letters. Continue reading

IRS Issues Section 162(m) Guidance

Section 162(m) was added to the Internal Revenue Code (IRC) in 1994 in what was seen as a reaction to escalating executive pay. Commonly referred to as the “$1 million pay cap,” Section 162(m) denied subject companies the corporate tax deduction for compensation paid to the CEO (referred to as the Principal Executive Officer or PEO) and other proxy-named executive officers (NEOs) that exceeded the $1 million statutory limitation. Exceptions to the amount of covered compensation pursuant to Section 162(m) were permitted if such compensation was deemed “performance-based” under shareholder-approved plans. Continue reading

A Proposed Legislative Alternative to Corporate Governance and the Theory of Shareholder Primacy

On August 15, 2018, U.S. Senator Elizabeth Warren of Massachusetts introduced proposed legislation, the Accountable Capitalism Act, in the U.S. Senate. The legislation would require all U.S. corporations with $1 billion or more in annual revenues to obtain a federal charter as a “United States corporation” and would obligate corporate directors to consider the interests of all corporate stakeholders in their corporate governance activities. Continue reading

Share Buybacks and Executive Compensation – A New SEC Commissioner Offers a Perspective

Robert J. Jackson, Jr. is a new member of the United States Securities and Exchange Commission (SEC), having been appointed by President Trump in January 2018. Commissioner Jackson previously served as a New York University School of Law professor, where he taught in the areas of corporate law, corporate governance, corporate finance, and executive compensation. Continue reading

CEO Pay As Governed by Compensation Committees: The Model Works!

Last year, two articles in the Wall Street Journal and Harvard Business Review criticized the overall CEO pay model at U.S. companies. The authors of both articles, Robert Pozen and S. P. Kothari, link their criticisms to shortfalls in executive compensation governance (e.g., poor disclosure, misleading metrics, and selecting inappropriate peer groups) that have been allowed and/or encouraged by Board Compensation Committees. In this article, we address these critiques. Continue reading

U.K. Companies Must Comply With Gender Pay Gap Reporting

While U.S. companies are addressing the new requirement to report CEO pay ratio statistics to shareholders, U.K. companies are now required to report statistics on the gender pay gap. Such reporting is mandated for no later than April 4, 2018, and the reporting must occur on the company’s public-facing website and submitted directly to the government using its dedicated online reporting service. Such reporting is in direct response to the U.K. Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. Continue reading

Tax Cuts and Jobs Act Become Law

On Friday, December 22, 2017, President Trump signed into law the most comprehensive overhaul of the U.S. tax code since 1986.

The purpose of this Pay Governance Viewpoint is to provide an overview of the law’s key provisions that affect corporate executive compensation programs. In the coming weeks, Pay Governance will write an in-depth series of tax law Viewpoints concerning executive compensation. Continue reading

In Certain Jurisdictions, Companies May Be Prohibited from Requesting or Providing an Employee’s Salary History

New York City is the latest legal jurisdiction to prohibit companies from inquiring about a prospective employee’s compensation history during the recruiting process, joining 2 other cities (San Francisco and Philadelphia), 4 states (California, Delaware, Massachusetts, and Oregon), and 1 other jurisdiction (the Commonwealth of Puerto Rico) in implementing such legislation. Continue reading

SEC Issues More Guidance on CEO Pay Ratio Rule

On September 21, 2017, the Securities and Exchange Commission (SEC) released additional guidance on the CEO pay ratio disclosure requirement. While many had hoped for some form of delay or outright reprieve from the required disclosure, it is now evident that the SEC expects companies to fully comply with the reporting requirement in early 2018 when the rule becomes effective.
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