New IRC 162(m) Executive Compensation Rules: Managing the Expanded Requirements

Tracking Covered Employees and Meeting New Reporting Requirements

A live 110-minute CPE webinar with interactive Q&A


Thursday, June 14, 2018

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

or call 1-800-926-7926

This webinar will provide employee benefits advisers and counsel with a thorough guide to the new executive compensation and covered employee rules contained in the revised Section 162(m) passed in last year’s tax reform bill. The panel will describe the expansion of “covered employee” definition, including the “once covered/always covered” provisions, detail which companies are subject to the requirements, describe transition relief and required steps to comply with the new section and explain how the new rule might affect disclosure requirements. The webinar will also examine some of the additional planning opportunities for Companies under the new rules as well as discuss the impact of expected future guidance regarding Section 162(m).

Description

One significant change for employee benefits advisers under the new tax law is the expansion of IRC Section 162(m), which will create complexity and additional requirements for many public companies. The section imposes new limits on deductibility of compensation of certain highly paid employees.

Section 162(m) previously imposed a $1 million limit on the deductions that a publicly traded company could take for compensation payments made to “covered employees,” defined as the CEO (or equivalent), and one of the three highest paid officers of the company. The prior rule did not include the CFO (or equivalent) and, most importantly, exempted all performance-based compensation from the deduction limits.

The revised section increases the class of covered employees, thereby expanding the reach of the executive compensation deduction limitations, institutes a “once covered/always covered” rule change, eliminates some exemptions, and makes additional companies subject to the deduction caps.

Listen as our experienced panel provides a practical guide to the new Section 162(m) compensation deductibility rules and offers concrete steps to set up tracking and compliance practices.

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Outline

  1. Prior provisions of Section 162(m)
  2. Material changes to the deductibility of executive compensation
  3. New requirements for performance-based compensation and commission
  4. Grandfathering and transition relief provisions
  5. Tracking employees subject to disclosure under the “once covered/always covered” rule
  6. New reporting requirements
  7. Expected future 162(m) regulations and new planning considerations

Benefits

The panel will discuss these and other relevant topics:

  • Navigating the challenges of determining covered employees under the new rules
  • Grandfathering and transition provisions in the new law
  • Structuring new compensation agreements and amendments to existing plans in light of the new 162(m) deduction limitations
  • Tracking employees subject to disclosure rules under the “once covered/always covered” provision of the law
  • Determining whether performance-based compensation is deductible based on the discretion of employer to reduce
  • Analyzing future guidance expected from the IRS to cover and discuss some additional planning opportunities for companies under the new rules

Faculty

Olshan, Regina
Regina Olshan

Partner
Skadden Arps Slate Meagher & Flom

Ms. Olshan is the global head of the firm’s Executive Compensation and Benefits Group. Her practice focuses on...  |  Read More

Patel, Henrik
Henrik Patel

Partner
White & Case

Mr. Patel, a Partner with White & Case LLP, counsels clients on the full spectrum of executive compensation and...  |  Read More

Riley, Leigh
Leigh C. Riley

Partner
Foley & Lardner

Ms. Riley is vice chair of the firm's Business Law Department. She focuses her practice on employee benefits and...  |  Read More

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