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Executive benefits


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How Compensation Committees Should Treat the CEO Pay Ratio Disclosure
"Typically, compensation committees perform certain activities such as reviewing CEO performance and setting CEO pay which is mandated by their charters with minimum requirements dictated by their listing exchange.... SEC counsel generally likes to keep these charters focused, although [the authors] have seen some with more detail about additional responsibilities, and some that expand the committee's role based on a company's unique circumstances." (Willis Towers Watson)
[Guidance Overview] Are Your Executive Compensation Arrangements Safe from the New Disability Regs?
"[W]hether the Final Rule applies to an executive compensation arrangement is dependent on [1] whether the particular executive compensation is subject to ERISA and thereby ERISA's claims procedure requirements, [2] whether there is a disability payment trigger under the executive compensation arrangement and [3] how the disability determination is made under the executive compensation arrangement." (McDermott Will & Emery)
The Next Generation of Compensation Clawback Policies
"BlackRock's clawback voting policy [has] changed substantially, and [is reprinted in this article].... [C]ompanies are considering (and investors are demanding) the next generation in clawback policies in light of some of the corporate 'scandals' during this period." (Winston & Strawn LLP)
[Guidance Overview] Clarifying the Use of Nonqualified Plans to Mitigate Lost Deduction Under the New 162(m) Regime
"After a covered employee's retirement or other termination of employment, the company still will be able to pay and deduct up to $1 million in benefits each year, even under the 'once a covered employee always a covered employee' rule.... If an employee defers compensation ... the company will be replacing current, non-deductible cash payments with a promise to pay cash in the future. If the future payouts amount to less than $1 million per year, the payouts will then be fully deductible[.]" (Winston & Strawn LLP)
[Guidance Overview] Don't Overlook Death and Disability Benefits in Reporting Potential Payments Upon Termination of Employment or Change in Control
"Many companies' equity incentive plans or award agreements provide for full or partially accelerated vesting upon an executive's termination of employment due to death or disability.... Compliance and Disclosure Interpretation (C&DI) Question 126.02 states that the Instruction 5 standard that the 'scope' of arrangements not discriminate in favor of executive officers would not be satisfied where the awards to executives are in amounts greater than those provided to all salaried employees -- which is nearly always the case." (Winston & Strawn LLP)
[Guidance Overview] Impact of the Tax Cuts and Jobs Act on Section 162(m)
"The Act's conference agreement ... makes clear that a contract that was in place prior to November 2, 2017, and that is renewed after that date, will be treated as a new contract that will no longer qualify for the transition rule. The requirement of a written binding contract under the transition rule raises issues such as whether a contract or plan subject to the compensation committee's discretion to adjust a performance award downward will result in the contract being ineligible for the transition rule." (Benefits Bryan Cave)
Overarching and Operating Principles of Executive Compensation (PDF)
"[F]our overarching principles form the foundation of an effective [executive compensation] program: ... [1] 'Purpose' captures why an organization exists, what its mission is with its various constituents, and its strategy and objectives.... [2] 'Alignment' captures the essence of agency theory ... by ensuring that management is aligned with and acting in the best interests of shareholders, and possibly in those of other stakeholders.... [3] 'Accountability' captures the relationship among pay, organization performance, and individual actions.... [4] 'Engagement' captures human motivation and the psychological implications of disciplines like behavioral economics and self-determination theory." (Willis Towers Watson)
The Purpose and Importance of Executive Compensation (PDF)
"[H]igh-performing corporations are increasingly important to global society -- beyond economic growth -- and a strategic, principles-based approach to executive compensation helps to drive optimal business performance. That means creating an effective executive compensation system ultimately generates value for senior managers, their companies (including other employees), the economy, and society." (Willis Towers Watson)
How Executive Compensation Changes Affect Employers
"As companies deal with this change, there are several issues they should consider. [1] Is grandfather relief available? ... [2] What's the administrative burden? ... [3] Could performance goals change?" (Bloomberg BNA)
Delaware Court Case May Have Far Reaching Effects on Director Compensation
"According to the Court's decision, the presence or absence of [prescribed annual] limits will determine whether director compensation is reviewed by Delaware courts under the business-friendly 'business judgment rule' or the more stringent 'entire fairness' standard if the compensation is challenged in a shareholder suit. Beyond the applicable legal standard of review, the Court's decision may increase the prevalence of 'strike' suits against public companies challenging director compensation." [In re Investors Bancorp, Inc. Stockholder Litigation, No. 169, 2017 (Del. Dec. 19, 2017)] (Meridian Compensation Partners, LLC)
[Guidance Overview] New Tax Law Strengthens Limits on Excessive Compensation
"Companies should be careful in determining which arrangements are grandfathered. It is not enough that a compensation arrangement was set forth in a valid writing on November 2, 2017; it must meet other requirements to qualify for grandfathering. While the exact scope of this grandfathering rule will need to be clarified by the IRS, it appears to mean payments that would have been tax deductible under the old rule as performance-based compensation or commissions will continue to be deductible if they are made pursuant to a contract that satisfies the grandfathering rule." (Poyner Spruill LLP)
Don't Disband That Compensation Committee of Outside Directors Just Yet
"[A] compensation committee qualifying under 162(m) still must certify the achievement of performance goals for performance periods ending in 2017. Most equity awards made before November 2017 should qualify for grandfathering under the 162(m) transition rule. Until IRS guidance clarifies the extent of the grandfathering protection, we don't want to do anything that might adversely affect that." (Winston & Strawn LLP)
[Guidance Overview] Annual Reporting Requirements for Incentive Stock Options and Employee Stock Purchase Plans
"[A] separate Form 3921 or Form 3922 [must] be filed with the IRS for each transaction ... even if one participant has multiple transactions during the year. If a company provides participants with an information statement that meets the substitute statement requirements, ... the company may aggregate transactions and provide only one substitute statement to each participant who had multiple transactions during the year." (Orrick)
Executive Comp Performance Metrics Will Change Under Tax Reform
"As a first step, carefully model the multi-year effect on earnings, especially when earnings in one year are depressed by tax reform and then artificially lifted in the year after. When contemplating adjustments to as-reported financial results, best practice is to set a principle and follow the principle consistently regardless of whether it helps or hurts incentive payouts in any given year. We expect that most companies using after-tax performance measures will back out the earnings effect of the tax cut on after-tax measures." (Financial Executives International Daily)
[Guidance Overview] Tax Cut and Jobs Act Adds Significant New Tax on Exempt Organizations
"The Act added new Code Section 4960, which imposes a 21% excise tax on any tax-exempt organization that pays remuneration to an employee that exceeds $1 million in a tax year ('4960 Tax').... [O]rganizations must determine ... [1] Is my organization subject to the 4960 Tax? ... [2] Which employees does the 4960 Tax affect? ... [3] How do I calculate remuneration for purposes of the 4960 Tax? ... [4] Who is liable for the 4960 Tax? ... [5] What is an excess parachute payment?" (Nixon Peabody LLP)
[Guidance Overview] How the Tax Act Upsets the Dynamic Between the Board of Directors and the Executive Compensation Committee (PDF)
"From a corporate governance perspective, the significance of these new provisions carries the potential for recalibrating the relationship between the board and its executive compensation committee.... This is due not only to the new taxes being applied, but also due to ... the fact that [these provisions] are specifically targeted at executives of tax-exempt hospitals and health systems[.]" (McDermott Will & Emery, via BNA's Health Law Reporter)
[Guidance Overview] Tax Cuts and Jobs Act: New Executive Compensation Rules
"Programs that were in place on November 2, 2017, and which therefore may be entitled to grandfathered treatment, cannot be 'materially' modified without losing that protection and becoming subject to the new rules. Until the IRS issues guidance concerning what constitutes a 'material' change, employers should approach such changes cautiously.... [E]xtending an option's exercise period, or altering the parameters of an incentive award, might be considered material changes." (Spencer Fane)
Delaware Supreme Court Revives Lawsuits Over Directors' Compensation
"[W]hen stockholders have approved an equity incentive plan that gives the directors discretion to grant themselves awards within general parameters, and a stockholder properly alleges that the directors inequitably exercised that discretion, then the ratification defense is unavailable to dismiss the suit, and the directors will be required to prove the fairness of the awards to the corporation." [In Re Investors Bancorp, Inc. Stockholder Litigation, No. 169, 2017 (Del. Dec. 13, 2017, revised Dec. 19, 2017)] (Winston & Strawn LLP)
Executive Compensation Performance Metrics Will Change Under Tax Reform
"To shareholders and compensation committees, it makes sense to shield financial performance measures from the tax change. However, the tax deductibility of executive compensation -- and/or the accounting for executive compensation -- could negatively affect the company." (Financial Executives International Daily)
Impact of Compensation-Related Litigation on Public Companies
"[C]ompanies must analyze the applicable facts and circumstances in order to determine whether a benefit is a perquisite, and significant gray areas remain.... Companies should review their award agreements and resolutions relating to net share settlement or share tax withholding provisions to ensure compliance with the Section 16 rules." (Skadden)
[Guidance Overview] 2018 Deadlines Approach to Furnish ISO and ESPP Information Statements and Returns
"[A] corporation [must] furnish a written statement to any employee or former employee who either [1] exercised an incentive stock option (ISO) ... during 2017 or [2] during 2017 first transferred legal title to shares acquired under the corporation's employee stock purchase plan (ESPP).... The corporation must furnish these statements on Forms 3921 and 3922 no later than January 31, 2018.... [C]orporations [also] must file returns with the [IRS] on Forms 3921 and 3922 no later than February 28, 2018, if filed on paper, or April 2, 2018, if filed electronically." (DLA Piper)
[Guidance Overview] Tax-Exempt Organizations Face New 21% Excise Tax on Compensation in Excess of $1 Million
"When setting compensation or agreeing to provide severance payments, Tax-Exempt Organizations ... may offer lower compensation in recognition of the tax, cap compensation to avoid the tax, or maintain the right to modify or reduce compensation to the extent needed to avoid the tax.... Tax-Exempt Organizations may require the departing employee to cover the excise tax amount out of his or her parachute payment." (Schulte Roth & Zabel LLP)
[Guidance Overview] How the Changes to Section 162(m) Executive Comp Rules Impact Your Company (PDF)
"[The] changes will necessitate reviewing proxy disclosures related to Section 162(m) and considering whether provisions and practices related to complying with the previously applicable Section 162(m) rules should continue to be followed. As companies both public and private prepare for their compensation decisions in 2018, here are key things you need to know[.]" (Debevoise & Plimpton LLP)
Bringing Pay-for-Performance Into Focus Requires the Right Lens
"While performance can be measured many ways, the most common method is to use total shareholder return (TSR).... There are many definitions of pay, including reported, realized, and realizable pay. While each definition has its place, [the authors] believe reported and realized pay are less useful in pay-for-performance analyses.... [This] discussion brings the best measure into focus." (Meridian Compensation Partners, LLC)
[Guidance Overview] Impact of Section 162(m) Changes and Transition Relief on Excessive Compensation (PDF)
"[Deferred Tax Assets (DTA)] recognized in the financial statement as of the enactment date related to deferred compensation expense and share-based compensation expense should be evaluated to determine if the new Section 162(m) rules would impact the ability to claim a deduction in the future and adjusted accordingly. Going forward, a DTA should only be recognized for future compensation expense recognized for deferred compensation plans and share-based awards if a tax deduction is expected under the new rules, taking into account transition, when the deferred compensation is paid to the employee and when the share-based awards are exercised or vested." (Deloitte)
[Guidance Overview] Qualified Equity Grants by Private Companies Under New Section 83(i) (PDF)
"Private corporations with broad-based compensatory stock option or RSU programs should evaluate whether resulting shares are qualified stock for which notification requirement applies: If so, confirm that payroll systems and brokerage accounts properly handle differences in income tax and FICA tax timing, and that proper notice is provided to recipients. If not, determine what is necessary to fall within the qualified stock definition to confirm deferral opportunity for employees." (Deloitte)
Are ISOs Back?
"Generally, ISOs do not result in a tax deduction for the company, but they do provide favorable tax consequences for the employee recipients. As long as the company will not be able to deduct the gain on equity awards anyway, why not provide better tax treatment to the executives?" (Winston & Strawn LLP)
[Guidance Overview] Executive Compensation Changes Under Tax Reform: An Update for Plan Sponsors (PDF)
"While the transition rule may seem straightforward, employers should exercise caution before modifying existing contracts if they wish to preserve the grandfathered status of those arrangements.... [If] qualified stock is transferred to a qualified employee and the employee timely makes a Section 83(i) election, the employee recognizes income with respect to that stock in the tax year that includes the five-year anniversary of the date the employee's rights in the stock vest, subject to earlier inclusion if certain events occur." (Drinker Biddle)
[Guidance Overview] Tax-Exempt Organizations Face New Executive Compensation Rules Under Tax Reform
"The excise tax applies not only to pay exceeding $1 million in a given year, but also to any 'excess parachute payment'.... [which] is any payment contingent on the employees separation from employment to the extent the separation payments exceed three times the employees average pay over the preceding five years. Excess parachute payments do not have to reach $1 million before becoming subject to the excise tax[.] (Kaufman & Canoles, P.C.)
[Guidance Overview] New Code Section 83(i): Qualified Equity Grant Programs Permit Employees to Elect to Defer Income Taxes on Stock Options or RSUs (PDF)
"[W]hen an employee vests in a qualified equity grant, the employee can elect to defer for up to five years the income taxes that otherwise would be due on the date the stock vests or is transferred to the employee.... [W]hen an employee makes a Code section 83(i) deferral election, the 'deferral stock' begins its holding period for long-term capital gain tax treatment on the date the qualified stock is transferred to the employee, even though the employee will not pay taxes on the value of the qualified stock for up to five years." (Trucker Huss)
[Guidance Overview] Nonprofits and Governments Face Compensation and Benefits Issues Under the New Tax Law
"What employers are covered? What employees are covered? What compensation is covered? What is excess compensation? What are excess severance benefits? How do these rules differ from the comparable rules for taxable employers? How does the tax on excess compensation differ from the 'reasonable compensation' rules? How do the excise taxes affect the ability to promote medical employees to other positions? How do the excise taxes affect deferred compensation? How does the excise tax affect fringe benefits?" (Venable LLP)
[Guidance Overview] Does Repeal of the Section 162(m) Performance-Based Exception Signal the End of Performance Pay?
"The following plan provisions will need to be evaluated due to the new changes: [1] Compensation Committee composition; [2] Individual award limits; [3] Performance goals and exclusions and their pre-establishment; [4] Compensation Committee certification of satisfaction of performance goals; and [5] Prohibition on the use of positive discretion." (Orrick)
How Can a Tax-Exempt Employer Manage the New Excise Tax on Executive Comp?
"[T]ax-exempt employers may be able to mitigate (or at least manage) the sting of the new excise tax through a combination of traditional supplemental executive retirement plans and long-term incentive plans, and (where possible) well-designed non-competes that comply with the proposed regulations under Code Section 457(f) published last year. In ideal circumstances, a tax-exempt employer may even be able to avoid the excise tax entirely." (Verrill Dana LLP)
Looking for a Silver Lining in the 162(m) Tax Act Changes
"Eliminating the deductibility of performance-based compensation reduces the need for a company to base a substantial portion of its annual compensation on performance factors.... Eliminating the requirement that the performance goals must be established by a compensation committee comprised solely of two or more outside directors will give companies the flexibility to include on their compensation committees board members who would not have qualified as 'outside directors' under the requirements of Section 162(m).... Eliminating the requirement that the material terms of any performance goals must be disclosed to and subsequently approved by the company's shareholders before the compensation is paid will give the compensation committee flexibility to select any performance metrics it wants." (Winston & Strawn LLP)
[Guidance Overview] New 'Excess' Compensation Excise Tax for Tax Exempt Organizations
"[T]he excise tax only applies if the covered employee's total severance payments equal or exceed three times the employee's 'base amount.' ... For this purpose, the 'base amount' is the employee's average annual taxable compensation for the five years preceding his or her termination date ... [T]he excess severance payment excise tax can apply even if the individual's compensation for the year is less than $1 million." (Hunton & Williams LLP)
New Excise Tax on 'Excess' Executive Compensation Paid by Tax-Exempt Employers
"Tax-exempt employers must [1] identify their 'covered employees' for 2018 and 2017 (because ... the 'covered employee' status persists into subsequent years), and [2] review their existing executive compensation and severance arrangements (including any deferred compensation plans) to determine whether payments to any covered employee in 2018 or future years could result in the imposition of the 21% excise tax." (Jackson Lewis P.C.)
Tax Reporting for Stock Comp: Understanding Form W-2, Form 3922, and Form 3921
"For employees with stock compensation, tax-return paperwork and the information it contains can be confusing and hard to decipher. This [article] provides an overview of the reporting you need to understand." (myStockOptions.com)
[Guidance Overview] Impact of Tax Reform on Some Private Company Equity Awards: Limited Income Tax Deferral Opportunities for Employees
"Additional guidance is needed to clarify, among other things, [1] the scope of the term 'transferable' in the context of transferability to employer corporations (including whether an exception will apply for customary provisions, such as an employer's right to repurchase an employee's stock after his or her employment relationship is terminated); [2] under what circumstances the provision requiring immediate income inclusion upon an individual's qualified stock becoming 'transferable' applies in light of the provision deferring income inclusion for five years after the first date on which the rights of the individual in the qualified stock become 'transferable'; and [3] when the holding period for qualified stock begins if a Section 83(i) election is made." (Perkins Coie LLP)
With Participation Rates Flat, Some NQDC Plan Sponsors to Make Changes
"The overall rate of companies offering nonqualified deferred compensation plans (NQDCPs) increased to 85% in 2017 from a survey low of 77.2% in 2015 ... 87% of respondents don't plan on making any changes to their NQDCPs.... Average participation rates were relatively flat at 47% ... Participation rates were notably higher in plans offering matching contributions (60%), while plans not offering a company contribution had an average participation rate of 37%." (planadviser)
[Guidance Overview] 2018 Tax Reform: Executive Compensation Changes for Publicly Held Entities
"[Publicly traded] employers will no longer be constrained by strict requirements ... in setting and approving performance goals and can make adjustments to performance goals at the conclusion of a performance period that increase compensation payable where appropriate.... [Employers will] need to reevaluate their performance metrics to take into account the impact of the reduction of the corporate tax rate to 21%. In some cases, performance metrics affected by this reduction may be permitted or required to be adjusted." (Jackson Lewis P.C.)
Initial Tax Disclosures Regarding 162(m) in Proxy Statements
"[T]he Section 162(m) deduction limit for performance-based compensation has been repealed ... effective for taxable years beginning after December 31, 2017 ... This leaves the question about what to say about Section 162(m) during the upcoming proxy season. [This article provides] some examples from recent proxy statements[.]" (Dodd-Frank.com)
[Guidance Overview] Section 162(m) After the Tax Cuts and Jobs Act: What to Do Now
"Companies will have more freedom to design executive compensation programs that address pay for performance without complying with the strict rules of the qualified performance-based compensation exception under Code Section 162(m).... Companies may consider implementing longer vesting schedules for equity awards or extending the timing for cash payouts of awards or other compensation ... by spreading the payments over multiple years in an attempt to fit within the annual $1 million threshold[.]" (Skadden)
How State Legislatures Might Rock the World of Employee Compensation in Response to the Recent Federal Tax Law
"States imposing income taxes on employee compensation are likely to consider changing their tax laws to avoid the imposition of federal income taxes on compensation applied to (and typically withheld to pay) state and local income taxes. One possible approach would be to change state laws to remove compensation from income subject to state taxation and, instead, to impose a payroll tax on employers that would raise an equivalent amount of revenue. The employer would retain the right to deduct the State payroll tax from its taxable income as an expense of the trade or business, while the employer paid tax would not be considered income to the employee." (Mintz Levin)
[Guidance Overview] New Deferral Opportunity for Stock Awards
"The new qualified equity grant deferral feature requires a broad-based plan that is available to 80% of employees. This may make the plan less attractive to some employers. However, for employers that want to provide a broad-based deferral opportunity for equity grants, this could be a significant benefit to employees." (Bradley)
Tax Cuts and Jobs Act Raises Executive Comp Questions
"Given the big drop in the corporate tax rate starting this year, established bottom-line-based goals such as earnings per share ... will in most cases be much easier to attain at the end of performance periods already in progress.... Companies presumably will adjust for the change when establishing performance measures for multi-year periods that begin this year.... But what, if anything, companies will do to alter executive pay for periods already in progress remains to be seen." (CFO)
[Guidance Overview] Executive Compensation Arrangements for Tax-Exempt Organizations
"This practice note sets out important legal and tax considerations when developing executive compensation arrangements for tax-exempt organizations. It provides guidance on practical steps for attorneys advising their tax-exempt clients on various aspects of executive total compensation packages, including deferred compensation, incentive compensation, severance, vacation, and fringe benefits." (Venable LLP)
[Guidance Overview] New Opportunity to Defer Tax on Certain Equity Awards and Repeal of Performance-Based Exception to 162(m)
"The Tax Bill creates a new Section 83(i) of the tax code, which allows certain employees of private companies to defer taxation on the exercise of certain stock options or the settlement of restricted stock units for up to 5 years.... Because Section 83(i) requires that 80% of all U.S. employees to be participants, it is likely that only early stage corporations will be able to utilize this deferral opportunity." (Mintz Levin)
[Guidance Overview] Immediate Action Needed Due to Reduction in Maximum Tax Withholding on Equity Compensation
"As a result of conflicting language between existing Treasury regulations and the revised rates in the Act, it is not clear whether the new withholding rate for wages under $1 million will be 22% or 28%.... Under the financial accounting rules, if shares are withheld in an amount in excess of the maximum statutory rate in the applicable jurisdiction, the award must be classified and accounted for as a liability, resulting in mark-to-market accounting." (Morgan Lewis)
[Guidance Overview] Tax Act Provides Planning Opportunities for Deferred Comp Plans and SERPs
"Once an employee becomes a 'covered employee' under Section 162(m), payments made to him or her will remain subject to the $1 million limit on deductibility forever, even on the individual's death! What planning strategies are left to us to reduce the impact of this limit? ... Deferring compensation until retirement or termination of employment is one[.] ... [A]fter a covered employee's retirement or other termination of employment, the company still will be able to pay and deduct up to $1 million in benefits each year." (Winston & Strawn LLP)
[Guidance Overview] New Tax Law Brings Penalties for Top Paid Non-Profit Executives
"While there was concern among tax-exempts that the tax bill might reduce or even eliminate the presumption of reasonableness, that turned out not to be the case. But the final version of the legislation for the first time imposed a tax on certain excess compensation and excess parachute payments" (Mintz Levin)
[Guidance Overview] Benefit and Compensation Provisions in the Tax Cuts and Jobs Act
"The silver lining on the cloud of lost deductions is that the loss of the performance-based compensation exception may provide some additional flexibility in terms of plan design and administration.... [T]he ability to pay for qualified parking on a pre-tax basis will still benefit employees who can exclude these amounts from income. There is uncertainty whether the contributions made by employees to pay for pre-tax transportation benefits through salary deferrals would also be nondeductible to the employer." (Winston & Strawn LLP)
[Guidance Overview] The New Tax Rules for Executive Compensation and Employee Benefits
"Compensation discussion and analysis sections (CD&As) for 2018 proxy statements should be reviewed to determine if any changes are advisable related to the Section 162(m) discussion. Companies should catalog grandfathered arrangements and implement processes to ensure that such arrangements are not unintentionally materially modified.... Employers that sponsor [retirement] plans allowing for loans should consider whether plan participant communications should be revised early next year to alert participants to the greater flexibility allowable for rollover of loan offset amounts." (McGuireWoods)
Pay Ratio Disclosure: How to Tackle the SEC Rule
"[This article presents] a framework and proposed approach to pay ratio disclosure that might greatly simplify your analysis and work plan. [The authors] encourage you to conduct a trial run soon to increase your chance of success for next proxy season. One benefit of a trial run is that you can see how results vary by exercising discretion with respect to the varying methods. There is a key concept driving the whole analysis: determining the median employee." (Wilson Sonsini Goodrich & Rosati, via Corporate Secretary)
[Official Guidance] Text of IRS CCM 201752008: Allocating Deduction Limitation Under Section 162(m)(6) (PDF)
"Corporation Y is a tax -exempt hospital and is part of an aggregated group with Corporation X, a covered health insurance provider. Both Corporations X and Y paid applicable individual remuneration to Employee A. The regulations under Section 162(m)(6) provide that the Section 162(m)(6) deduction limitation must be allocated among members of an aggregated group. Is remuneration paid by Corporation Y otherwise deductible and taken into account for purposes of applying the deduction limitation even though Corporation Y is a tax -exempt entity? ... Yes, remuneration paid by Corporation Y is otherwise deductible and is taken into account in applying the deduction limitation under Section 162(m)(6)." (Internal Revenue Service [IRS])
[Guidance Overview] Tax Reform Provisions Affecting Employer-Provided Compensation and Benefits (PDF)
"[1] Repeal of performance-based compensation exception to $1,000,000 deduction limit ... [2] Excessive compensation of non-profit covered employees subject to a 21% tax penalty ... [3] Limits and phase-out on deduction for employer-operated eating facilities ... [4] Elimination of employer deduction for certain transportation fringe benefits ... [5] Suspension of income exclusion for qualified bicycle commuting reimbursement fringe benefit ... [6] Suspension of income exclusion and employer deduction for qualified moving expense reimbursement ... [7] Extension of rollover period for plan loan offsets ... [8] Employer credit for paid family and medical leave." (Trucker Huss)
Year-End Checklist of Items to Review, Know, and Consider About Your Stock Compensation
"As 2017 draws to its close, the new tax-reform law is getting a lot of attention, and it will certainly affect tax rates in the future ... [D]on't forget the fundamentals of year-end planning. [This checklist] summarizes what you need for comprehensive year-end financial and tax planning with stock compensation." (myStockOptions.com)
Pay Ratio Disclosure Checklist
"While recent interpretative guidance from the [SEC] has provided additional flexibility in this process, public companies still need to consider appropriate disclosures regarding pay ratio calculations in addition to the disclosure of the pay ratio. [A] checklist of essential disclosure items to consider when drafting pay ratio disclosures is set forth [in this article]." (Dodd-Frank.com)
[Guidance Overview] Handling 'Excess' Employee Remuneration for Tax-Exempt Organizations
"Boards of tax-exempt organizations making payments to covered employees that are subject to the excise tax will need to consider ... [1] how the total cost to the entity bears upon the reasonableness of the compensation, and the benefit to the section 501(c)(3) tax exempt entity.... [2] the information that needs to be provided to potential donors to the organization.... [3] it may be possible to accelerate the vesting of the amounts due under the agreement, so that they are treated as income before the start of the organization's next taxable year." (The Wagner Law Group)
The Impact of the 2017 Tax Reforms on Employment-Based Benefits and Executive Compensation (PDF)
"[A] new 'Qualified Equity Grant' ... to allow employees of nonpublicly traded companies to elect to defer taxation of stock options and restricted stock units (RSUs) for up to five years after the exercise of such stock options or the vesting of RSUs.... Repeal of 'recharacterization' of Roth IRA conversions ... Extended rollover periods for deemed distributions of retirement plan loans ... Tax relief for retirement plan distributions to relieve 2016 major disasters ... New credit for paid family and medical leave." (BakerHostetler)
CEO Compensation Slows and Shifts
"The median increase in target pay for S&P 1500 CEOs was 4.4% in 2016, down from 5.9% in 2015.... The median increase [in earned pay] was 2.2%, significantly down from 10.4% in 2015.... CEO salaries for the S&P 1500 increased a mere 1% in 2016, and over half of the S&P 500 CEOs didn't receive a 2016 salary adjustment." (Willis Towers Watson)

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