Practical Advice for 162m Compliance


The recent amendments to the Section 162(m) regulations largely follow the changes set forth in the proposed regulations issued in 2011, clarifying two exceptions from the Section 162(m) tax deductibility limit:

  • The treatment of restricted stock units (RSUs) and certain other forms of stock-based compensation under the transition rule applicable to newly public companies; and
  • The requirement under the "qualified performance-based compensation" exception to set a per-employee limit applicable to stock options and stock appreciation rights (SARs) under an equity plan intended to comply with such exception.

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