We know we are not supposed to get too excited about a proposed tax bill, but The Tax Cuts and Jobs Act, the amended version of which was released by the House on November 3, 2017, is no ordinary tax bill. Not only does it propose sweeping changes to the taxation of executive compensation and employee benefits, it aims to be effective as of January 1, 2018 – which means limited time to mobilize against…
The IRS has issued guidance in Notice 2017-46 (the “Notice”) relaxing the rules applicable to U.S. financial institutions that require the collection of foreign taxpayer identification numbers (Foreign TINs) from U.S. nonresident aliens. Under anticipated amendments to temporary regulations that are described in the Notice, withholding agents will be required to collect a Foreign TIN and date of birth (in the case of an individual account holder) on a foreign person’s beneficial owner withholding certificate (e.g., a…
They say every cloud has a silver lining and so it seems with recent developments related to the CEO pay ratio rule. By releasing new guidance on the rule last week, the SEC has dashed hopes that it would delay the effectiveness of the rule. However, at the same time, it has taken important steps to reduce the compliance burden. The guidance, which consists of an Interpretive Release, revised pay ratio Compliance and Disclosure Interpretations,…
At the ABA Annual Meeting on Friday, September 15th, the Securities and Exchange Commission (SEC) Division of Corporation Finance Director Bill Hinman (speaking for himself and not the SEC) said that the SEC did not plan to delay the implementation of the CEO pay ratio disclosure rules. Mr. Hinman also mentioned that the SEC anticipates issuing guidance on the pay ratio rule in the near future. We note that although the Financial Choice Act that…
As most employers are aware, the obligation to report non-qualified deferred compensation (NQDC) that complies with Internal Revenue Code (IRC) Section 409A is currently suspended, but non-compliant NQDC is required to be reported in Box 12 of an employee’s Form W-2. Employers should also be aware of the additional Form W-2 reporting requirements that may apply to NQDC, including equity awards that are considered NQDC, such as deferred restricted stock units: the obligation to report…
On April 21, 2017, the Trump Administration issued Executive Order 13789, which instructed the IRS to review all “significant tax regulations” issued on or after January 1, 2016 to identify as targets for modification, rescission or delayed effectiveness any regulations that (i) impose an undue financial burden on U.S. taxpayers; (ii) add undue complexity to the Federal tax laws; or (iii) exceed the statutory authority of the IRS. Having completed this review, earlier this month,…
Companies preparing CEO pay ratio disclosure for the 2018 proxy season should not assume they will be able to rely on the Privacy Exemption with regard to gathering information about non-US employees. For a summary of the key provisions of the SEC’s final CEO pay ratio disclosure rule and the limited exemptions provided for non-US employees, see Baker McKenzie’s recent client alert. Invoking these exceptions will likely be difficult in practice. Companies should, however, generally be…
Many companies that are taking their stock plans out for shareholder approval this proxy season to replenish their share reserve are also amending their plans to accommodate recent changes in law, governance practices and new developments, such as the recent change that FASB adopted to the accounting rules for share-based awards (ASC 718) allowing withholding of shares to satisfy tax withholding rates at a rate higher than the minimum tax withholding rate without triggering liability…