Headlines about "Executive benefits"

Gathered from the web by the editors at BenefitsLink.com.
[Guidance Overview] Newly Minted Rules for Deducting Performance Compensation under Section 162(m) (PDF)
1 page. Excerpt: "The new ruling will not apply for performance periods beginning on or before January 1, 2009 or for compensation paid pursuant to employment contracts in effect on February 21, 2008 (excluding renewals, either automatic or by agreement)." (Hanson Bridgett LLP)

[Guidance Overview] Benefits Quiz from the April 2008 Trucker Huss Benefits Report (PDF)
Pages 1-2 of 10 pages. Excerpt: "The . . . questions are designed to refresh, and to fine tune, your benefits expertise. Some of the answers (which are found on page 8 of this Newsletter) may surprise you." (Trucker Huss)

Senate Bill Would Impose Greater Restrictions on Executive Compensation
Excerpt: "Sen. Harry Reid (Nev.) has introduced the Corporate Executive Compensation Accountability and Transparency Act (S. 2866), which would require greater disclosure of senior corporate officer compensation; empower shareholders and investors to protect themselves from fraud; limit conflicts of interest in determining senior corporate officer compensation; and close corporate tax loopholes utilized to subsidize senior corporate officer compensation." (Wolters Kluwer)

An Effective Annual Incentive Plan for Executive Compenation – It Starts with the Design Process
Excerpt: "Short-term variable compensation has become a critical component of most employers' total reward programs. Diverse perceptions exist regarding the use of variable pay; its advantages and disadvantages include . . . ." (Hay Group)

Executive Salary - The Foundation of Total Compensation
Excerpt: "Base salary is the least complex form of compensation, yet some would argue it is the most important when viewing pay in the workforce. For top executives in larger organizations, base salary generally is not the most significant form of compensation in terms of value, but it can have a significant bearing on the actual value of other remuneration components." (Hay Group)

The Wall Street Journal / Hay Group CEO Compensation Study
Excerpt: "Hay Group recently partnered with The Wall Street Journal to conduct The Wall Street Journal / Hay Group CEO Compensation Study of the largest companies in the United States. Our purpose was to examine how CEOs were compensated across all forms of pay in fiscal 2007. The study focused on 200 companies with more than $5 billion in annual revenue that filed their proxy statements after October 1, 2007. Hay Group researched these public filings, examining all primary components of CEO compensation." (Hay Group)

Executive Compensation: Is It Too High?
Excerpt: "There are five tools companies generally use in setting executive compensation, points out E-Commerce Times columnist Theodore F. di Stefano: base salary, short-term incentives, long-term incentives, employee benefits and perks." (Ecommerce Times)

[Guidance Overview] IRS Changes the Rules for Performance-Based Compensation
Excerpt: "Recent changes to the way in which the Internal Revenue Service (IRS) interprets 'performance-based compensation' under Internal Revenue Code (IRC) Section 162(m) have narrowed the types of arrangements that may be classified as performance-based and will require publicly-held companies to reexamine these arrangements or jeopardize the financial soundness of current tax and financial planning methodologies." (Littler Mendelson P.C.)

[Guidance Overview] Severance Pay Under Section 415
Excerpt: "One of the major changes in the Regulations related to the necessity to include certain post severance compensation in the definition of Code §415 Compensation. Apparently, some plan documents (not McKay Hochman's) had previously been drafted to state that any amounts paid after separation of service (termination of employment), even regular pay, would be disregarded for all plan purposes. While this language was not wrong, the IRS/Treasury became concerned that some amounts of compensation that were actually earned during the participant's period of employment would be disregarded." (McKay Hochman Co., Inc.)

[Opinion] Pay Gap Fuels Worker Anger
Excerpt: "The gap between top executive and employee compensation has never been greater. That's triggering lower morale and productivity on some corporate staffs, and making it more difficult to attract and keep talent, even in a slowing economy." (The Wall Street Journal)

When the Company Share Price Is a Factor in Compensation
Excerpt: "[47] percent of private sector employees in the United States have had at least part of their compensation tied to their company's profitability or stock price. That's right. If you include stock options, deferred stock, profit sharing or cash bonuses pegged to a company's performance, nearly half of the 114 million employees of private-sector companies had some stock or profit-related pay at the end of 2006." (The New York Times; free registration required)

Text of Corporate Executive Compensation Accountability and Transparency Act, S. 2866 (PDF)
24 pages. Excerpt: "To require greater disclosure of senior corporate officer compensation, to empower shareholders and investors to protect themselves from fraud, to limit conflicts of interest in determining senior corporate officer compensation, to ensure integrity in Federal contracting, to close corporate tax loopholes utilized to subsidize senior corporate officer compensation, and for other purposes." (American Benefits Council)

[Official Guidance] Text of First Periodic Update to IRS 2007-2008 Priority Guidance Plan (PDF)
49 pages. Excerpt: "The attached update sets forth the guidance on the original 2007-2008 Priority Guidance Plan that we have published. Although the update may indicate that a particular item on the plan has been completed, it is possible that one or more additional projects may be completed in the plan year relating to that item. The update also includes 61 items of additional guidance, some of which have already been published.' See section entitled EMPLOYEE BENEFITS and section entitled EXECUTIVE COMPENSATION, HEALTH CARE AND OTHER BENEFITS, AND EMPLOYMENT TAXES. (Internal Revenue Service)

[Guidance Overview] The Final Deadline for 409A Compliance Is December 31, 2008
Excerpt: "The good news is that we now know a lot more about the details of 409A. Therefore, final compliance will be a bit easier as we are able to follow an established pattern and start from model language we have developed. And we have added one new step to the checklist, thanks to the IRS' creation of a self-correction program for 409A errors." (Winston & Strawn LLP)

[Guidance Overview] Flurry of Cases Could Make Employers Decide to Select 'Top Hat' Plans for Further Review (PDF)
Pages 1-4 of 8 pages. Excerpt: "In light of the fact that employers may be required to establish affirmatively that their unfunded deferred compensation arrangements satisfy ERISA's requirements for the top hat exemption, employers may wish to review this recent spate of cases to determine if they continue to have adequate comfort that their plans intended to be limited to a 'select group of management or highly compensated employees' are in fact so limited." (White & Case LLP)

[Guidance Overview] Self-Correction Program Helps Employers Avoid 409A Penalties
Excerpt: "Under the IRS correction program, certain failures corrected in the same tax year as they occurred will result in no income inclusion or additional taxes under Code Sec. 409A." (Wolters Kluwer)

For Top Executives, Some Perks Come Tax-Free
Excerpt: "About one in five of the nation's large public companies paid part of their chief executive's tax bill, the Corporate Library found in a study of perks reported between February 2007 and February 2008. The findings are based on more detailed public disclosures aimed at transparency in executive benefits. The group's report, published as 'Tax Reimbursement: The Grossest Perk,' was based on a study of more than 3,000 companies." (The Atlanta Journal-Constitution)

[Guidance Overview] Hot HR Compliance Issues for Small Businesses in 2008
Excerpt: "The purpose of this article is to highlight a few issues before they become critical [such as Section 409A, flex plans, qualified retirement plans, and 401(k) contributions]." (Employee Benefit News; free registration required)

[Guidance Overview] Additional Guidance Regarding Minnesota Taxation of Deferred Compensation, Severance and Stock Option Income Paid to Nonresidents
Excerpt: "The Minnesota Department of Revenue is preparing guidance addressing withholding and reporting issues raised by the new law taxing some deferred compensation, severance and stock option income paid to nonresidents. The law now taxes income earned in Minnesota but received when the taxpayer is not a state resident. The new law requires employers to withhold tax from such payments beginning April 1, 2008." (Oppenheimer Wolff & Donnelly LLP)

AFL-CIO Blames Executive Pay for Credit Crisis
Excerpt: "The AFL-CIO said . . . that 'outrageous' pay packages for banking industry executives were partly to blame for the credit crisis, encouraging risky investment strategies that ended up hurting shareholders and consumers." (AP via The Washington Post; free registration required)

Obama Wants Shareholders to Have Say in Executive Pay
Excerpt: "Democratic presidential candidate Barack Obama is prodding his populist economic message Friday by demanding that company shareholders have a say in how much executives get paid. Obama, in prepared remarks he planned to make to reporters Friday, says he wants Congress to pass legislation he has sponsored that would require corporations to have a nonbinding vote by shareholders on the compensation packages. Under Obama's legislation, shareholders could not veto a compensation package . . . ." (Associated Press WorldStream via NewsEdge Corporation via Human Resource Executive Online)

[Guidance Overview] The AMT and Stock Options: Taxpayers Continue to Lose in the Appellate Courts
Excerpt: "This 'substantially nonvested' exception to current taxation has been the subject of a substantial amount of litigation fueled by taxpayers' attempts to postpone the date of taxation so that subsequent stock losses can be recognized. One of the arguments posited by taxpayers in recent cases is that stock acquired through the exercise of stock options is 'substantially nonvested' if the company's insider trading policy prevents employees from trading the company's stock during certain blackout periods." (BNA Tax Management Inc.)

S&P 500 Chiefs Get Big Boost in Pension Benefits
Excerpt: "Declines in annual performance-based bonuses and stock-option awards have cut into the rate of growth in CEO pay, according to a new report – but pension benefits were up more than 25%." (PLANSPONSOR.com; free registration required)

[Guidance Overview] Informal Funding of Deferred Compensation Arrangements (PDF)
Pages 5-7 of 11 pages. Excerpt: "One size does not fit all. For example, a small private company may choose to informally fund its deferred compensation plans with COLI due to the pre-retirement death benefit obligation under the plans and the company's paternalistic nature and emphasis on long-range planning." (Deloitte)

[Opinion] In the Boardroom, Every Back Gets Scratched
Excerpt: "START with the obvious. Executive pay at the top levels in this country is stunning in its size and its rate of climb. According to the Congressional Research Service, average pay for chief executives stood at 179 times average worker pay in 2005, up from a multiple of 90 in 1994. Adjusted for inflation, average worker pay rose by a total of only 8 percent from 1995 to 2005; median pay for chief executives at the 350 largest companies rose 150 percent." (The New York Times; free registration required)

Executive Pay Rises in Spite of Being in the Spotlight
Excerpt: "WASN'T 2008 supposed to be the year of shareholder victory on the executive compensation front? After all, tighter disclosure rules kicked in last year, and -- the theory went -- once companies had to shine a spotlight on their compensation practices, they were bound to make them better. Politicians, never loath to acknowledge the national mood -- particularly in an election year -- held several hearings about excessive pay." (The New York Times; free registration required)

Can Your Long-Term Incentive Plan Become More Performance Based Again? (PDF)
Excerpt: "A top responsibility for Compensation Committees is to ensure a strong linkage between executive compensation and company performance. Long-Term Incentive Plans (LTIPs) typically provide the largest component of senior executives' compensation, most often through one or more of three equity-based types: Stock Options, Restricted Stock, and Performance Shares. This InsightOut™ assesses the relative strength of the linkages between company performance and each type of equity when included in an LTIP." (Buck Consultants)

Mandatory Clawbacks: Rep. Frank to Re-Engage on Executive Comp Oversight, Regulation
Excerpt: "In the wake of the 'fire sale' of Bear Stearns & Co., House Financial Services Committee Chairman Barney Frank (D-MA) indicated that he may require companies to adopt 'clawback policies' to recoup executive compensation when shareholders suffer large losses." (HR Policy Association)

[Official Guidance] IRS Solicits Comments: Wages for FICA Purposes Arising from Deferrals and Payments Under Nonqualified Defered Compensation Plans (PDF)
1 page; June 2 deadline. The IRS is soliciting comments concerning an existing final regulation, 'Federal Insurance Contributions Act (FICA) Taxation of Amounts Under Employee Benefit Plans' (Sec. 31.3121(v)(2)-1). Excerpt: "This regulation provides guidance as to when amounts deferred under or paid from a nonqualified deferred compensation plan are taken into account as wages for purposes of the employment taxes imposed by the Federal Insurance Compensation Act (FICA). Current Actions: There is no change to this existing regulation. Type of Review: Extension of currently approved collection." (Internal Revenue Service)

20% of Companies Pick Up CEOs' Taxes on Perks
Excerpt: "CEOs are just like the rest of us: They hate paying for things out of pocket if they can find someone else to foot the bill. Fortunately for them, in many cases there is someone willing to pick up the bill for selected personal expenses: the shareholders. A new study from The Corporate Library finds that the most common form of perk being granted to CEOs these days is something called a tax 'gross-up.' In plain English, it means that a company pays the taxes owed by the CEO on benefits granted by the company." (USA TODAY)

[Guidance Overview] Continued Insurance Coverage, Reimbursement and In-Kind Benefit Commitments Under Section 409A
7 pages. Excerpt: "Internal Revenue Code Section 409A regulates 'deferred compensation' which, in many instances, is easy to identify. If an employer has a legally enforceable commitment to pay money to an employee in some future year, that generally is deferred compensation.However, what if an employer doesn't agree to pay a specified amount of money at a specified time in the future? Let's say the employer instead agrees to reimburse the employee's country club dues for the five years after employment, or pay the employee's life insurance premiums or provide the employee with use of a car for a certain period of time post-termination. How are such items analyzed under Section 409A?" (Faegre & Benson LLP)

[Guidance Overview] The International Implications of IRC §409A
Excerpt: "Deferred compensation arrangements issued by foreign-owned operations or by US companies with operations abroad were not originally exempt from the application of Internal Revenue Code §409A. However, under proposed and now final regulations issued by the Internal Revenue Service ('IRS'), there are exemptions that apply which are geared towards limiting the effect of §409A on non-resident aliens and US citizens or residents who participate in non-US plans." (Faegre & Benson LLP)

[Guidance Overview] Valuing Employee Stock Options for Closely Held Companies
Excerpt: "Until recently, non-public companies that granted options, warrants or other types of stock-based compensation to their employees were not typically required to determine values for these complex derivative instruments. Current financial reporting standards such as FASB Statement no. 123(R), Share-Based Payment, as well as recent federal tax law changes (IRC § 409A) are compelling companies to value these financial instruments using stock option valuation models developed for publicly traded stock options." (American Institute of Certified Public Accountants)

Executive Compensation at Largest U.S. Companies
Excerpt: "The Wall Street Journal has partnered with Hay Group for an ongoing look at annual executive compensation at the largest public U.S. companies. Use this sortable chart to see which CEOs earn what." (The Wall Street Journal)

[Guidance Overview] Executive Compensation Update, March 28, 2008
Excerpt: "[This edition of the newsletter] features a cover story written by Mr. Melbinger titled 'IRS Reverses Long-Standing Position on Performance-Based Compensation Under Code Sec. 162(m).'" (Winston & Strawn LLP)

Is the Executive Pay Model Improving? Depends on Whom You Ask
Excerpt: "Corporate directors are considerably more optimistic than institutional shareholders about the effectiveness and future of the U.S. executive pay model. Both groups think the new proxy disclosures have improved transparency but need more work. These and other findings are from a new study by Watson Wyatt Worldwide, 2008 Report on Directors' and Investors' Views on Executive Pay and Corporate Governance." (Watson Wyatt Worldwide)

[Opinion] Florida's Government Should Rethink Its Generous Pay and Benefits
Excerpt: "The Legislature, still talking about cutting taxes, is ignoring a related issue. The salaries and benefits of many government workers are far too generous. Elected officials at the state and local levels won't bring public compensation into line with private-sector pay for two reasons. First, the employees and their unions exert heavy pressure during campaigns, and second, the politicians have cut themselves a big slice of the same pie." (The Tampa Tribune)

[Official Guidance] IRS Notice 2008-42: Modifications of Split-Dollar Life Insurance Arrangement Entailing No Change to Underlying Life Insurance Contract (PDF)
4 pages. Excerpt: "This notice provides guidance regarding the application of §§ 101(j) and 264(f) of the Internal Revenue Code (Code) to life insurance contracts that are subject to split-dollar life insurance arrangements. Specifically, this notice provides that a modification of a split-dollar life insurance arrangement that does not entail any change to the life insurance contract underlying the arrangement will not be treated as a material change in the life insurance contract for purposes of §§ 101(j) and 264(f)." (Internal Revenue Service)

[Guidance Overview] Continued Insurance Coverage, Reimbursement and In-Kind Benefit Commitments Under Section 409A
7 pages. Excerpt: "It is vital to properly structure insurance coverage, reimbursement and in-kind benefit commitments to either avoid deferred compensation status under Section 409A or to comply with the rules of Section 409A. The regulations under Section 409A provide much flexibility to make such commitments workable, at least with respect to most commonly provided commitments." (Faegre & Benson LLP)

OMB Announces New Cap on Executive Compensation Costs in Federal Contracts
Excerpt: "The ceiling on executive compensation costs under government contracts is $14,284 higher in fiscal 2008 than in fiscal 2007, according to an administration memo released Tuesday." (National Journal Group, Inc.)

[Guidance Overview] IRS Clarifies 162(m) Ruling Position — Finance Departments Breathe Sigh of Relief
Excerpt: "Companies will need to reexamine all their performance plans to determine whether to amend those that pay out awards at termination or retirement. Although section 162(m) requires shareholders to approve the material terms of a performance-based compensation plan, eliminating provisions in future grants that would trigger payment at termination or retirement is not likely to require a shareholder vote on the plan terms. [The table on the target page] should help companies determine whether a performance plan will meet the performance-based-compensation exception. The table applies to all cash- and stock-based plans with an annual or multiyear performance goal." (Watson Wyatt Worldwide)

Highlights from the Recent Congressional Hearing on CEO Pay and the Mortgage Crisis (PDF)
6 pages. Excerpt: "On March 7th, the House of Representatives' Committee on Oversight and Government Reform ('the Committee') held a hearing titled 'Executive Compensation II: CEO Pay and the Mortgage Crisis.' In advance of the hearing date, the Committee released a staff memorandum examining the apparent breakdown between shareholder interests and the compensation and retirement benefits awarded to three prominent CEOs whose companies are involved in the mortgage crisis. This was the second in a series of hearings that focus on executive compensation." (Frederic W. Cook & Co., Inc.)

Survey Shows Most Boards Not Renegotiating Severance Packages
Excerpt: "According to a new report from Watson Wyatt, 54 of the 70 companies studied by the consulting firm, or 77%, did not provide their exiting CEOs with any termination payments beyond what was disclosed to shareholders in their 2007 proxies." (Financial Week; free registration required)

[Guidance Overview] A Couple More 162(m) Issues
Excerpt: "IRS representatives [have] indicated that only an amendment that applies to the performance-based components of a plan or agreement would void the transitional protection provided by Rev. Rul. 2008-13, not amendments of other, unrelated provisions." (Michael S. Melbinger via Winston & Strawn LLP)

Bear Stearns' Ills Draw Company Stock 'Investigation'
Excerpt: "The law firm of Stember Feinstein Doyle & Payne, LLC has announced it is investigating possible illegal conduct relating to the Bear Stearns Companies Inc. Employee Stock Ownership Plan, Profit Sharing Plan and Deferred Compensation Plan." (PLANSPONSOR.com; free registration required)

[Guidance Overview] Section 409A and Non-U.S. Retirement Arrangements - What You Should Know
Excerpt: "Are any US taxpayers participating in any of your company's non-US retirement plans? If so, you should know about Section 409A of the US Internal Revenue Code. Section 409A deals with the inclusion in gross income of deferred compensation under nonqualified deferred compensation (NQDC) plans. Failure to comply can result in harsh tax consequences for US tax-paying employees and possibly for their employers. The definition of NQDC plans is broad and includes most non-US retirement arrangements as well as other types of plans, such as nonqualified salary-deferral arrangements and severance plans." (Mercer LLC)

[Guidance Overview] Preparing for the Code section 409A Compliance Deadline
Excerpt: "The extension for amending plans for compliance with Code section 409A and the final regulations thereunder under Notice 2007-86 does not mean that companies or individuals should wait to address these issues until later this year. During the course of an IRS examination, one company received an information and document request from the IRS agent inquiring regarding what the company was doing to comply with Code section 409A." (The Bureau of National Affairs, Inc.)

[Guidance Overview] SERP and Nonqualified Deferred Compensation Funding
Excerpt: "Employers may want to consider a qualified pension plan as a funding vehicle for executive compensation to the extent allowable. In this article, we're going to explore this potential and discuss why 2008 may be the best year to put more emphasis on your qualified defined benefit plan." (JPMorgan)

[Guidance Overview] State Source Taxation of Deferred Compensation - Employers Should Monitor Changes
Excerpt: "Employers that maintain deferred compensation arrangements should be aware of state income tax rules regarding compensation earned while an individual is a resident of a particular state. It is also important to understand how these rules intersect with the federal law limiting state source taxation. A recent development in Minnesota provides an example." (Faegre & Benson LLP)

[Opinion] Executive Pay - A Proposal to Protect Core Pay-for-Performance Programs
Excerpt: "The U.S. executive pay-for-performance model is not only viable, it is essential to the continued success of corporations and the U.S. economy. That may not be what critics of the system want to hear, but the numbers tell a compelling story. Watson Wyatt's multi-year studies at 1,000 large U.S. companies find a consistently strong, positive relationship between realizable pay (i.e., pay earned for the year, including equity value appreciation) and performance." (www.boardmember.com via Watson Wyatt Worldwide)

Shareholders Poised to Increase Their Attacks on Excessive Executive Pay
Excerpt: "Human resources executives may be in for a pounding this proxy season as shareholders become more vocal than ever about executive compensation." (Workforce Management; free registration required)

[Guidance Overview] Intelligent Design Under Code §409A
Excerpt: "[T]he primary purposes of § 409A are as follows: to make nonqualified deferred compensation (NQDC) plans available to participants (presumably executives) on a basis no more favorable than qualified deferred compensation (generally qualified retirement plans), to stop tax schemes around such NQDC plans and their funding by prohibiting funding of these plans outside the United States, to stop internal 'runs on the bank' by executives by forcing them make distribution elections well in advance of the actual distribution, and to eliminate hidden and handshake arrangements by requiring all NQDC plans to be in writing." (The Bureau of National Affairs, Inc. via JPMorgan)

[Guidance Overview] Using Alternative Coverage To Offset COBRA
Excerpt: "Why do employers offer alternative coverage independently from COBRA? Sometimes, the employer is legally required to do so, as in the case of State continuation laws affecting insured plans. Other times, as with retiree plans, coverage is provided as a reward for service to the employer. In other instances, employers effectively use alternative coverages to reduce their COBRA liability or COBRA administrative expenses. For instance, alternative coverage often is used as part of a severance package negotiated incident to an employee's involuntary termination of employment." (HRTrainingCenter.com)

Congressional Panel to Review Executive Payouts Given by Troubled Firms
Excerpt: "Chief executives of three financial companies who received outsize pay packages even as their shareholders lost billions in the spreading credit crisis are scheduled to testify before Congress on Friday, and if a memorandum released ahead of the hearing is any guide, they can expect quite a grilling." (The New York Times; free registration required)

Supplemental Information on CEO Pay and the Mortgage Crisis (PDF)
23 pages. Excerpt: "In preparation for the Committee's hearing, the Committee has received thousands of pages of documents from the three companies, including board minutes and intemal company emails. The Committee staff also has reviewed hundreds of public Securities and Exchange Commission (SEC) filings and consulted with leading experts in executive compensation. This memorandum summarizes some of the questions raised by the materials reviewed by the Committee staff." (U.S. House Committee on Oversight and Government Reform)

House Panel Questions High Pay for CEOs
Excerpt: "The heads of three companies implicated in the mortgage crisis have been asked to explain how they collectively received hundreds of millions of dollars in compensation while their companies were losing money. Slated to appear Friday before the House Oversight and Government Reform Committee were Angelo Mozilo of Countrywide Financial Corp., the nation's largest mortgage lender; Stanley O'Neal, formerly of Merrill Lynch & Co.; and Charles Prince, formerly of Citigroup Inc." (The Washington Post; free registration required)

[Guidance Overview] IRS Provides Transition Relief for 'Tainted' Performance-Based Compensation (PDF)
2 pages. Excerpt: "Now that the IRS has issued Revenue Ruling 2008-13, companies have additional time to review employment agreements, plans, and contracts to identify payment terms similar to the terms described in the ruling and to determine potential 'fixes' for future performance-based compensation. Although the transition relief is helpful, companies need to review and monitor the expiration and renewal provisions of employment agreements to determine the applicable transition period." (Holme Roberts & Owen LLP)

[Guidance Overview] Section 162(m) - IRS Confirms Previous Private Letter Ruling; Ruling Will Be Effective on a Going-Forward Basis
Excerpt: "Companies should review plans and arrangements that are intended to qualify as performance-based compensation under Section 162(m) to determine if the plans or arrangements provide that compensation will be paid without regard to whether the performance goal is attained if an individual is involuntarily terminated, terminates his or her employment for good reason, or retires." (Wilson Sonsini Goodrich & Rosati)

[Guidance Overview] IRS Delays Application of Its Holding Under Recent Section 162(m) Executive Performance Pay Ruling (PDF)
1 page. Excerpt: "Publicly traded corporations should consider the following actions during the transition period: Review any agreement providing performance-based compensation covered by Code section 162(m) (or acceleration of such compensation) to determine if it would permit payment upon the impermissible employment terminations (i.e., terminations other than death, disability and change in control) regardless of the level of performance attained; If any agreement subject to Code section 162(m) contains such language, consider amending it, as necessary, so that the performance-based compensation will be paid only if actual performance is achieved or upon death, disability or change in control; and Consider the implications for the company's proxy disclosures related to performance-based compensation." (Haynes and Boone, LLP)

[Guidance Overview] IRS Ruling on Performance-Based Pay - Permissible Payment Events (PDF)
3 pages. Excerpt: "In recent years, the IRS has begun to increasingly audit public companies on Section 162(m) issues and to take conservative positions on debatable issues under Section 162(m). Many companies' published compensation policies indicate that section 162(m) deductibility is required for the company's programs generally (although some state to the contrary). Moreover, pending legislation would substantially tighten the rules under Section 162(m). Thus, public companies should consider limiting their exposure on this and other grey areas under Section 162(m)." (Groom Law Group)

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