A New Tax Day Dawns in the U.S. after President Trump signed the Tax Cuts and Jobs Act into law on December 22, 2017. This Client Alert details the provisions in the Tax Act that impact executive compensation directly. Most notably, the Tax Act makes some significant changes to Section 162(m) of the Internal Revenue Code.
GOP Tax Proposal Eviscerates Current Executive Compensation Designs and Practices—Perhaps?11/10/2017
On November 2, 2017, the House Ways and Means Committee released the GOP's Tax Proposal, also known as the Tax Cuts and Jobs Act and the potential harbinger of death for many current executive compensation programs. The Tax Proposal has already been amended by the Chairman of the House of Representatives' Ways and Means Committee, and is likely to undergo further changes as it winds its way through Congress. Also, the Senate released a summary of its plan late on November 9 and reconciliation between the House and Senate bills will need to occur. President Trump wants this signed into law by Christmas, so there is a lot to be done in a very short period of time. Thus, there could be many changes between now and then, including the possibility of no bill.
This Client Alert details the "worst-case scenario" key provisions that impact executive compensation directly and also discusses the immediate issues companies need to think through so they at least have some chance to take action before December 31, 2017 if they want to try and address some of the potential issues that this Tax Proposal would raise if it makes it into law in its current form before the end of the year. Download Client Alert (PDF) On March 31, 2015, the Internal Revenue Service (IRS) published final regulations under Section 162(m) of the Internal Revenue Code. The IRS indicated that the regulations are not intended to embody substantive changes, but rather clarification of certain aspects of the application of Section 162(m).
Download Client Alert (PDF) The IRS recently issued new proposed regulations under Code Section 162(m) that clarify: (1) what companies must do in order to successfully utilize the performance-based compensation exception to the Code Section 162(m) limit; and (2) what compensation can qualify for the IPO compensation relief from Code Section 162(m). This Client Alert looks at these new proposed regulations. The IRS is accepting comments until September 22, 2011.
Download Client Alert (PDF) This article by Robbi Fox was published in the October 2010 issue of workspan magazine. The article looks at new legislation that impacts the deductibility of compensation under Internal Revenue Code Section 162(m) for certain organizations and the implications if these provisions are made to apply to all public companies.
Download Article (PDF) This Client Alert summarizes the Internal Revenue Service's Notice 2007-49, which clarifies that the IRS will exclude CFOs from being "Covered Employees" for purposes of Code Section 162(m), issued June 5, 2007. This clarification is necessary given the recent changes the U.S. Securities and Exchange Commission made to the compensation disclosure rules.
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