Winston’s Executive Compensation Blog features insights on the latest legislative, regulatory, case law, and practical developments concerning executive compensation. The posts focus on executive compensation and employee retirement benefit issues for corporations, boards of directors, executives, and fiduciaries.
It has been a long time (2007) since I have written on split-dollar life insurance arrangements, as the use of this compensation vehicle has declined over the years. And I generally don’t write about compensation issues for tax-exempt organizations.
Some public company executives have a problem: the company imposes stock ownership guidelines on them and these become stricter over time pursuant to the demands of investors and proxy advisors.
Subjective Performance Goals After Elimination of the Performance-Based Compensation Exception 12/04/18
The performance-based compensation exception to Code Sec. 162(m)’s $1 million cap on deductible compensation was eliminated by the Tax Cuts and Jobs Act of 2017, effective in 2018. This likely will result in many companies losing the ability to deduct substantial amounts of compensation. However, a potential silver lining inside this dark cloud of elimination is that compensation committees no longer need to make incentive compensation payments based solely upon the attainment of objective, pre-established performance goals, approved by the company’s shareholders.
A few weeks ago, I posted on the SEC’s release of C&DI’s clarifying its liberalization of the “Smaller Reporting Company” definition earlier this year. But I neglected to mention that the New York Stock Exchange (NYSE) had proposed a change to its rules on the same subject just one day before the SEC.