How the Tax Reform’s Changes to Section 162(m) Executive Compensation Rules Impact You
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- As a result of the Tax Cuts and Jobs Act’s expansion of Section 162(m) coverage, many companies will be surprised to learn that their executive compensation deductions may be limited by the “new” Section 162(m), including foreign private issuers who have executive officers based in the United States and privately held companies that issue public debt.
- As companies – both public and private – prepare to make compensation decisions in 2018, this update addresses key things that you need to know about these changes.
- The changes to Section 162(m) necessitate reviewing existing arrangements (and related proxy disclosure) to determine whether provisions and practices related to complying with the prior rules should continue to be followed, and how best to protect the deductibility of grandfathered compensation arrangements.