Weinberg & Company

              Certified Public Accountants


AUGUST  2015


What’s in your paycheck?  

The SEC last week approved, by 3-2 vote, a Pay-Gap Rule that will require companies to disclose the difference in executive compensation compared to median employee compensation. The disclosure requirements are expected to take effect with 2017 compensation. Dissenting SEC Commissioner, Daniel Gallagher, described the pay-ratio rule as a “textbook example” of “social policy masquerading as disclosure requirements,” which are helping encourage companies to stay private. The U.S. Chamber of Commerce is evaluating a court challenge and Congress is considering new legislation to repeal the contentious rule.  [Read more: SEC Press Release]  

Giving back

Continuing with the task list promulgated by the Dodd-Frank Act, the SEC last month passed a measure, by 3-2 vote, that will expand the circumstances under which companies must “claw back” performance-based bonuses awarded to executive officers, whether or not there was misconduct. Although clawbacks have been around since the WorldCom and Enron scandals, the SEC did not, until now, require the return of compensation in the absence of misconduct. Catching many off guard, the SEC did not provide detail on how companies should measure gains in the value of unexercised or unvested equity awards. [Read more: SEC Press Release]

Ready for Lease Accounting?

One of the most significant accounting changes in recent history is about to occur. The requirement to report lease liabilities on the balance sheet is now an almost certainty. To learn more, read Weinberg Managing Partner Corey Fischer’s by-lined article appearing in the coming issue of MicroCap Review magazine. [Read it now: Lease Accounting article]


Some ride

Ride-hailing company Uber is in the news again. It is appealing a negative California Labor Board ruling accusing it of misclassifying its drivers as independent contractors instead of employees. The company is being sued by several drivers in several states with similar claims. Labor unions are licking their chops, and angry taxicab drivers are staging traffic blockades in major cities internationally.

In spite of it all, Uber just got a lyft (sorry, we couldn’t resist) with an additional round of funding. Microsoft and the investment arm of Indian media conglomerate Bennett Coleman & Co invested $1 billion, bringing privately held Uber’s total funding to $5 billion and making for an estimated valuation of $51 billion. Just to put things in perspective: publically traded rental car company, Hertz, is only valued at $7.8 billion. For years, Hertz ran TV commercials with the slogan, “Let Hertz put you in the driver’s seat.” Uber puts you in the passenger seat — and investors are going along for the ride.

The joy is gone

Housecleaning service company Homejoy Inc. announced last week that it will shut down. Homejoy says the decision is a result of several lawsuits, which have hurt the company’s ability to raise more money. Those lawsuits center on the issue of whether Homejoy workers are independent contractors or employees (who would be entitled to a host of benefits and would be subject to additional labor regulations). The answer to that thorny question is causing many startups to re-think their business models — venture capital money is drying up for startups with contractor-based labor models. Consulting firm MBO Partners estimates 17.9 million people worked in 2014 as independents for 15 or more hours per week.  Homejoy had previously raised about $40 million from VC firms, and used David Hasselhoff to promote their cleaning service.

A history of taxation

We’re not saying you should celebrate your current federal tax bite, but can you imagine a 90% marginal tax bracket? You can if you’re old enough…we certainly are. Click the link below to see the U.S. Federal Individual Income Tax Rates from 1862-2013 in nominal and inflation-adjusted brackets. Provided by the Tax Foundation, we found the information absolutely fascinating — but then, we’re Accountants. If nothing else, consider it as early warning: history may indeed repeat itself.  [Tax Foundation – Tax Rates History]


Good to know the law…better to know the judge

Last week, U.S. District Judge Richard Berman denied an SEC request to throw out a motion by a former Standard & Poor’s Ratings Services executive, to have her case heard in federal court rather than before an SEC judge. This represents the third federal court decision since June to question the constitutionality of how the SEC’s five administrative law judges are appointed.  The Wall Street Journal reports that “because of more latitude granted by the Dodd-Frank financial law, the agency [SEC] has been relying on its own judges more often.” According to Cornerstone Research, the SEC sent 82% of its cases to its in-house judges in the six months through March, compared with less than half in the fiscal year ended September 2005.


There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest of them have to pee on the electric fence for themselves.  Will Rogers

If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.  Milton Friedman


Simply the right choice


Weinberg & Company is a leading, international, full service, multi-office CPA firm serving clients throughout the United States and the Pacific Rim. Founded over two decades ago, the practice groups include: Assurance and Audit, Tax and Accounting, and Advisory Services. Weinberg has a depth of knowledge and experience to meet the needs of both public and privately held companies, high net worth individuals, entrepreneurs, family offices, and can provide customized business management services. www.weinbergla.com

1925 Century Park East, Suite 1120  

Los Angeles, CA 90067

(310) 601-2200

6100 Glades Road, Suite 205

Boca Raton, FL 33434

(561) 487-5765  

Room 2109, 21/F, Shui On Centre

6-8 Harbour Road, Wanchai, Hong Kong P.R.C.

Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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Corey Fischer
Firm Managing Partner



Jeffrey B. Engler
Director of Tax,
Los Angeles 


Bruce Weinberg
Florida Managing Partner




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