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SEC Adopts Final Pay versus Performance Disclosure Rule

On August 25, 2022, the Securities and Exchange Commission (SEC) finalized its long-delayed pay versus performance disclosure rule, as required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The final rule requires public companies (with certain exceptions) to describe the relationship between the compensation “actually paid” to their named executive officers (NEOs) and the financial performance of the company, generally over a five-year period. The rule is effective for proxy and information statements for fiscal years ending on or after December 16, 2022 and will be implemented through a new Item 402(v) of Regulation S-K.
In this Alert, we describe the scope and application of the final rule.

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Proposed Regulations Issued on Deferred Compensation Arrangements for Tax-Exempt Organizations

Time to Read: 1 minutes Practices: Executive Compensation & Employee Benefits, Tax-Exempt Organizations

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Today, Treasury and the IRS released proposed regulations under §457 of the Code, which governs the tax treatment of nonqualified deferred compensation paid to employees and independent contractors by tax-exempt organizations and state and local governments. The proposed regulations define key §457 terms, such as “substantial risk of forfeiture” and “bona fide severance pay plan,” and they include many other provisions regarding the treatment of deferred compensation under §457.

Today’s release also includes some modifications to the regulations under §409A, including changes to align with the proposed §457 regulations.

To see the proposed §457 regulations, click here. We will be issuing an Alert with a more comprehensive overview of the new proposed §457 regulations, as well as an Alert on the proposed §409A regulations. Meanwhile, please contact your Ropes & Gray advisor with any questions about the proposed §457 regulations.

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