On August 16, 2022, President Biden signed the Inflation Reduction Act (“IRA”) into law. One of the new provisions the IRA introduced is the stock buyback excise tax under Code section 4501, which applies as of January 1, 2023 and was designed to target large corporations that implement stock buybacks. Background Code section 4501 imposes a 1% excise tax on the value of covered corporation stock that is repurchased by the covered corporation or a…
2022 will be viewed as a year of political turmoil in the UK with three different prime ministers during the year. While all were leaders of the UK Conservative party, the tax policy objectives were significantly different leading to proposed changes being reversed in some cases. For more information on the latest developments in the UK, see our recent NASPP guest blog post here. *Thank you to our colleague Gillian Parnell in our London office…
In the last four weeks, the world has witnessed the widespread devastation and growing humanitarian crisis in the Ukraine caused by the Russian invasion. At the same time, multinational businesses have made significant decisions regarding the continuation of business in Russia and the Ukraine and regarding how best to protect their local employees. One aspect of those decisions relates to the operation of equity compensation plans in light of sanctions enacted in response to the…
Proxy advisors (e.g., Institutional Shareholder Services (“ISS”) and Glass, Lewis & Co (“Glass Lewis”)) have played a substantial role in the design of executive compensation for many years. This has been due to the strong reliance of institutional investors (as well as investment advisors) on the proxy voting recommendations of firms such as ISS and Glass Lewis. Some commentators have viewed the proxy advisors as being quasi-regulators without any formal oversight of their potential conflicts…
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law bringing significant changes to US tax law. One provision of the Act may further incentivize individuals to work as independent contractors instead of as traditional employees. The new provision allows for independent contractors, and for service providers structured as a partnership or other flow-through entities, the potential to deduct up to 20% of their revenue from their taxable income. And while…
On January 11, 2018, the IRS issued Notice 1036, which provides the percentage method tables for income tax withholding in 2018. Key developments include: The flat withholding rate on supplemental wages, such as equity awards, of $1 million dollars and under a year is now 22% – down from 25%. As anticipated, the mandatory supplemental withholding rate for compensation in excess of $1 million is now 37% – down from 39.6%. The backup withholding rate…
As of December 20, 2017, both the House of Representatives and the Senate have voted to approve the final version of the Tax Cuts and Jobs Act, in substantially the form released by the Conference Committee on December 15th. The bill is expected to be presented to the President for signature before Christmas, making US tax reform a reality for 2018.
Under current law, taxpayers who hold multiple lots of the same shares can identify which shares are considered sold for purposes of calculating capital gains. Section 13533 of the Senate tax bill would eliminate this flexibility and mandate a first-in, first out (FIFO) approach. This will adversely impact employees who have acquired low cost basis company shares in the past and continue to hold those shares. The obvious – Following enactment, employees will want to…
U.S. tax reform continues to move through the Halls of Congress at a brisk pace. Yesterday the House approved the bill proposed by the House Ways and Means Committee. For a discussion of the compensation-related provisions of the House bill, please refer to our alert dated November 13, 2017. The current draft of the conceptual mark-up under review by the Senate Finance Committee (the “Senate Mark”) has been amended in a way that generally aligns…
If you have been following the progress of U.S. tax reform, you will know that one of the most significant proposed changes in the compensation arena is currently up in the air, with a conflict between the final bill approved last week by the House Ways and Means Committee and the conceptual mark-up now under review by the Senate Finance Committee (the “Senate Mark”). Specifically, the final House bill eliminated proposed changes that would have…