IRS Issues Complex Proposed Regulations with Respect to Section 162(m)

On December 16, 2019, the Internal Revenue Service (IRS) released proposed regulations on the changes to section 162(m) of the Internal Revenue Code (162(m)) enacted by the Tax Cuts and Jobs Act of 2017 (TCJA). The proposed regulations provide extensive guidance on a number of critical issues under 162(m), including in particular:

• What constitutes a publicly held corporation (public company) subject to 162(m).
• How the “covered employees” of a public company are determined, including extensive rules with respect to what constitutes a “predecessor corporation” whose covered employees need to be considered.
• Extensive guidance with respect to the exception from the new rules in the case of written binding contracts in effect on November 2, 2017.

David Gordon

Dave Gordon’s practice as an executive compensation consultant stretches back over a decade. He has covered a variety of industries, including extensive experience with financial institutions and utilities. In addition to engagements for his own clients.

Dina Bernstein
Principal

Dina Bernstein has extensive experience advising on all aspects of executive compensation, working with companies on an ongoing basis, as well as in the context of mergers and acquisitions, spin-offs, initial public offerings, and other corporate events. Dina provides guidance to private and public companies across various industries regarding cash and equity incentive compensation arrangements, employment, severance and change in control agreements, overall compensation program design, pay governance practices, taxation, stock exchange listing requirements and securities regulation compliance.

Samantha Nussbaum
Principal

Samantha Nussbaum has consulted on behalf of public and private companies, compensation committees, and senior management on all aspects of executive compensation. Samantha’s consulting and legal background includes advising on executive compensation in the context of mergers and acquisitions, spin-offs, and initial public offerings; executive employment, severance, and change in control agreements; equity incentive plans; deferred compensation; and securities laws, including reporting and disclosure implications.