June 25, 2018
More on “Performance Awards in a Post-Tax Reform World”
– Liz Dunshee
Last month, I shared some predictions about the impact of tax reform on executive pay. And although other surveys show that companies have considered eliminating “performance-based” structures, this recent “Deloitte Consulting” survey confirms that for now, companies aren’t making many changes in response to the repeal of Section 162(m). Here are the key findings:
– None of the survey participants expect to reduce pay due to the loss in tax deductibility.
– 92% of participants indicated that they aren’t going to change the pay mix (fixed versus variable compensation) or executive incentive design structure. The most common change in executive pay structure reported by participants was adopting a new formulaic incentive plan.
– 55% of participants said they aren’t going to change the administrative provisions in their incentive plan documents.
– Only 44% of participants knew whether their pre-tax reform awards would be “grandfathered.”