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2018 Update for Code 162(m) Changes
The Tax Cuts and Jobs Act of 2017 made fundamental changes to Section 162(m) of the Internal Revenue Code. The general nature of those changes is noted below, followed by thoughts about their impact on public companies - and next steps that compensation committees should be considering. Forward-minded action is warranted in order to preserve corporate deductions, especially for severance and other post-employment compensation that were previously safe from 162(m). Feel welcome to contact Mark Poerio of Wagner Law for more information about these issues. See also this Harvard Governance Blog Summary.
No Future Exemption for Performance-based Compensation
Expanded "Covered Employee" Definition
New Companies Brought within 162(m)'s Scope
Anticipated Reaction from Shareholder Advisory Groups
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(from David Kokell, head of ISS U.S. Compensation Research, posted 1/25/2018 on Harvard Governance Blog):
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