Proposed 162(m) Regulations And Pre-IPO Equity Grants
July 5, 2011, 12:38 PM EDT
Law360, New York (July 5, 2011, 12:38 PM EDT) -- On June 23, 2011, the U.S. Internal Revenue Service issued proposed regulations that purport to clarify the application of certain existing regulations under Internal Revenue Code Section 162(m). As a general matter, Section 162(m) imposes a $1 million annual deduction limit on the compensation paid to “covered employees” of publicly held corporations (generally the officers named in the corporation’s proxy, other than the chief financial officer).
This deduction limit is subject to certain exemptions, including an exemption for “qualified performance-based compensation” (which is compensation that meets...
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