First service backdating stock options
Over the years, lawmakers have tweaked the tax code to limit disfavored forms of executive compensation, while regulators have increased the amount of disclosure companies must make. Barbara Lee (D-Calif.) has introduced the Income Equity Act of 2011 (H. 382), which would amend the Internal Revenue Code to prohibit deductions for excessive compensation for any full-time employee; compensation is defined as “excessive” if it exceeds either 0,000 or 25 times the compensation of the lowest-paid employee, whichever is larger.
The objective of this study is to examine the impact of a prior limitation on deductibility of compensation, Internal Revenue Code Section 162(m).
This paper will review the effectiveness of that provision in achieving its goals, and provide information on how much revenue it has raised or lost due to deductions for executive compensation. Companies have found it easy to get around the law. And it seems to have encouraged the options industry.
One of the major themes to come out of that conference was the difficulties planners face given the uncertainties in the current tax regime and economic environment in the wake of the national elections.
As a result of present circumstances, the editors gravitated towards approaches that did not narrowly focus on building wealth or minimizing taxes.
This month marks our annual focus on personal financial planning.
This issue builds upon the NYSSCPA's financial planner workshop held this past winter.