By Sheila Pursglove
Legal News
Without expert legal input, a “golden parachute” may be severely tarnished, according to Jackson native Bob Johnston, an attorney with Howard & Howard in Royal Oak, practicing in the areas of qualified retirement plans, executive compensation and employee benefit plans.
“Nearly every merger or acquisition provides challenges related to severance and other compensation payable to key executives of the acquired firm,” he explains. “Without advance planning, executives receiving ‘golden parachutes’ can incur substantial penalty taxes severely diminishing the value of their compensation package.
“In a recent bank merger, our firm served as special counsel to a group of 17 bank executives. By working closely with counsel for the merger parties, we not only assured that penalty taxes would be avoided, but in several cases, we secured favorable post-merger employment agreements and protections for the executives.”
Named among DBusiness “Top Lawyers,” and a member of the State Bar of Michigan and its section on Taxation Law, Johnston explains that the employee benefits and executive compensation practice involves a statutory and regulatory labyrinth.
“This tends to overwhelm clients who don’t work full-time on these issues but who are required to navigate and comply with ever-changing benefits laws,” he says. “I enjoy simplifying and breaking down a complex subject matter into understandable and practical advice – I enjoy providing solutions to puzzles.”
And some of those puzzles can be every bit as mind-boggling as the jigsaw puzzles, Soduko, Kakuro, crosswords, and jumbles that Johnston enjoys in his leisure time.
As an example, in the mid-1980s, Howard & Howard represented a large financial institution with extensive trust operations, that historically had offered institutional customers, such as pension plans, a variety of common trust funds. Johnston and a colleague were charged with converting those to proprietary mutual funds.
“The project presented what at first seem to be an overwhelming number of novel benefits and securities issues and very few banks in the Midwest had pursued similar conversions at the time,” Johnston says. “Within 12 months, we had assisted our client in successfully registering and offering its proprietary funds in compliance with ERISA and securities laws.
Looking back, I’m not sure exactly how the puzzles presented by this project were actually solved in that timeframe.”
Johnston shares his expertise as an instructor for the Certified Employee Benefits Specialist Program, co-sponsored by the Wharton School of Business, the International Foundation of Employee Benefit Plans and Michigan State University.
“The students are human resource generalists with little to no technical background,” he says. “What I enjoy most, particularly in the case of finance, is helping the students develop problem solving skills that transcend memorization. If I’ve done my job well, students will be able to practically apply those skills in benefits and compensation projects.”
He also is a frequent lecturer for numerous organizations, including the American Bankers Association, the Community Bankers Association of Illinois and the International Foundation of Employee Benefit Plans; and has authored articles for the American Bar Association’s Tort & Insurance Law Journal, and for Michigan Banker magazine.
In his highly specialized practice, Johnston constantly draws on a variety of skill sets including finance, writing, mathematics and technical analysis, skills he learned in his secondary and collegiate education.
He received his B.A., magna cum laude, from Albion College, an education heavily weighted in the liberal arts, including an emphasis in American literature, Greek and Roman literature, Latin, science and mathematics. This “hodgepodge” of academic pursuits led him to conclude that a career with flexibility and drawing on a variety of source materials would be ideal.
“From a very early age, I had identified a career in the law as providing exactly that type of flexibility,” he says.
He received his J.D. from the University of Michigan.
“The greatest highlight of my time at U of M was learning at the hand of some of the finest legal minds in the nation,” he says. “An extraordinarily high percentage of my professors had authored or co-authored leading texts and treatises. Although engaging with these scholars in Socratic dialogue was often intimidating, it was also a rewarding, intellectual challenge.
“Beyond that, it’s hard to beat a football Saturday in Ann Arbor.”
Johnston is a native of Jackson, where his father was born and still resides.
“I have many close friends there dating back to my grade school days,” Johnston says. “While Jackson is not exactly Mayberry, it will always be a very special place to me.”
Johnston and his wife of 26 years met when he was with Howard & Howard in Kalamazoo. The couple has made Farmington Hills their home since 1990, where they raised their son, a recent finance degree graduate; and a daughter who recently graduated with a degree in elementary education.
An avid music fan, Johnston regularly enjoys live music.
“I like to think it keeps me young, at least at heart,” he says.
He is also an avid golfer, when time permits; and falls are dominated by Michigan football and hosting large tailgates, which leads to another hobby. A craft beer enthusiast since the early 1980s, he loves incorporating that interest with travel around the world. He has been to Belgium, Great Britain and throughout the U.S. on beer related journeys and currently has approximately 600 to 800 beers in his “beer cellar.”
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