Inquiring minds want to know what to write about 162(m) deductibility in this year’s proxy statement. Just a short blog today to address this question.
For companies required to include a CD&A (and even many that are not, e.g., SRCs) currently, we generally draft this disclosure to address four points:
- The TCJA change,
- The lack of deductibility of compensation over $1 million,
- The Committee’s intention to pay amounts it believes are necessary and desirable (with a nod to continuing to pay performance-based compensation), and
- The Committee’s intention to preserve grandfathered treatment to the extent possible.
This will evolve as time passes, of course, but not much in the near future.
-Mike Melbinger, ComepnsationStandards.com February 27, 2020
