Cleary's "Who Are Your Section 162(m) "Covered Employees" After Mergers, Acquisitions and Other Transactions?" addresses key "Covered Employee" and associated executive compensation deductibility implications associated with the IRC §162(m) "predecessor rule" application to M&A transactions proposed by the IRS in December that - if adopted - may adversely affect acquisitive public companies, as well as acquisitive, IPO-bound private companies that target public or recently public companies. The informative memo explains the several types of transactions - including corporate reorganizations, spin-offs, and stock and asset transactions, and transaction company types - that may result in additional Covered Employees for the acquiror based on the predecessor rule, and suggests companies consider these implications during transaction negotiations to the extent feasible.
Access numerous additional resources on our Executive Pay page under Tax Reform-Related. This post first appeared in the weekly Society Alert!