Incentive Compensation

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COVID-19: Reductions in Executive Pay

Recent market volatility due to the coronavirus (COVID-19) pandemic has disrupted many companies’ day-to-day operations resulting in economic hardship that has caused companies to consider or implement various measures to reduce personnel costs, including pay cuts, furloughs and/or layoffs. When implementing such personnel cost-cutting measures, a number of companies have reduced executive pay, including reductions in base salary and bonus opportunities, and some have also reduced director retainers.
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COVID-19: Impact on Nonqualified Deferred Compensation Plans

Recent economic instability caused by the coronavirus (COVID-19) pandemic has caused many companies and their employees to suffer economic hardships that do not have a clear end in sight. As a result of ongoing fluctuations in the markets, uncertainty about job security and increased medical and other expenses, people are experiencing a real need for increased liquidity in the short term.
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COVID-19: Addressing Underwater Stock Options and Stock Appreciation Rights

The recent market volatility caused by the coronavirus (COVID-19) pandemic has caused precipitous drops in the stock prices of many companies, reducing the value of outstanding equity awards and potentially jeopardizing the effectiveness of these awards to reward and retain employees.  In particular, some companies may find that the exercise prices of their outstanding options and stock appreciations rights now substantially exceed the company’s current stock price.
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COVID-19: Considerations for 2020 Incentive Compensation Programs

The coronavirus (COVID-19) pandemic and the ensuing market uncertainty, as well as recently enacted legislation, have upended the compensation and benefit programs of many companies. These two memos are the first in a series of memos that will discuss considerations for companies to keep in mind in connection with their short- and long-term incentive compensation programs.
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Davis Polk Client Memo: IRS Issues Proposed Regulations under Section 162(m)

On December 16, 2019, the IRS issued proposed regulations under Section 162(m) of the Internal Revenue Code, which generally have the effect of limiting the tax deductibility of a public company’s compensation arrangements.

The proposed regulations provide highly anticipated guidance clarifying the substantial changes made to Section 162(m) by the Tax Cuts and Jobs Act.

This memorandum summarizes certain key aspects of the proposed regulations and identifies the components of the proposed regulations about which the IRS is seeking comment.
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