Board Confirms Unallowability of Executive Compensation Based on Changes in Securities and Dividends Prices
Client Alert | 1 min read | 05.31.17
In Exelis Inc. (ASBCA No. 58966, Mar. 29, 2017), the Board upheld the Government's disallowance of compensation paid under Exelis’ Long-Term Incentive Plan as expressly unallowable under FAR 31.205-6(i) and subject to level 1 penalties because it was “based on changes in the prices of corporate securities and dividends.” The amount of compensation was determined based on “total shareholder return” (TSR) using a formula that compared growth in the value of Exelis’ stock and dividends to other companies. The Board held that, “[a]s in Raytheon, the metric Exelis used to calculate and value the TSR compensation was TSR performance ratings, which were based on securities price changes and dividend payments.” The Board rejected Exelis’ argument that Raytheon could be distinguished because the TSR costs were “paid based upon a predetermined compensation award pool,” noting that “the plain language of the cost principle more broadly renders unallowable any compensation that is ‘calculated’ or ‘valued’ based upon‘changes in the price of corporate securities.”
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Client Alert | 4 min read | 12.04.25
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On November 12, 2025, Judge King in the U.S. District Court for the Western District of Washington granted in part Haldiram India Ltd.’s (“Plaintiff” or “Haldiram”) motion for a preliminary injunction against Punjab Trading, Inc. (“Defendant” or “Punjab Trading”), a seller alleged to be importing and distributing gray market snack food products not authorized for sale in the United States. The court found that Haldiram was likely to succeed on the merits of its trademark infringement claim because the products at issue, which were intended for sale in India, were materially different from the versions intended for sale in the U.S., and for this reason were not genuine products when sold in the U.S. Although the court narrowed certain overbroad provisions in the requested order, it ultimately enjoined Punjab Trading from importing, selling, or assisting others in selling the non-genuine Haldiram products in the U.S. market.
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