Employee Benefits Blog

IRS Releases Clarifying 162(m) Regulations

The IRS recently released final regulations clarifying two aspects of the “performance-based compensation” exception to the $1,000,000 limit on deductible compensation paid to covered employees under Section 162(m) of the Internal Revenue Code. Proposed regulations issued in 2011 provided that in order to qualify awards as “performance-based compensation” a shareholder approved equity plan must specify […]

April 20, 2015 | 3 min read | Tagged: Executive Compensation, IRS, Performance-Based Compensation, reliance period, Section 162(m)

Greg Gautam Partner

Don’t Miss Short-Term Deferral Day

Section 409A, the provision of the Internal Revenue Code that regulates the time and form of payment of nonqualified deferred compensation, contains a helpful exception for “short-term deferrals.” Specifically, Section 409A provides that a payment will not be considered nonqualified deferred compensation if the employer makes the payment on or prior to the 15th day […]

March 4, 2015 | 2 min read | Tagged: 409A, equity-based compensation, Executive Compensation, Incentive Plans, nonqualified deferred compensation, Performance-Based Compensation, short-term deferral

Greg Gautam Partner

Public Companies Should Consider Shareholder Reapproval of Section 162(m) Performance Compensation Plans Approved in 2009

As reported in Part 1 of our End of Year Plan Sponsor “To Do” Lists, Section 162(m) of the Internal Revenue Code limits the deduction a public company may take for compensation payable to “covered employees” to $1,000,000 per year. “Performance-based compensation” that meets the requirements of Section 162(m) is not subject to this limitation. […]

January 20, 2014 | 1 min read | Tagged: Executive Compensation, Incentive Plans, Performance-Based Compensation, Public Company, Section 162(m)

Greg Gautam Partner