American Rescue Plan Act of 2021: New Tax Deduction Limits on Public Company Executive Compensation

On March 17, 2021, Cravath prepared for its clients a memo entitled “American Rescue Plan Act of 2021: New Tax Deduction Limits on Public Company Executive Compensation,” which discussed the expansion of corporation tax deduction limitations on public company executive compensation. The change, which goes into effect for tax years beginning after December 31, 2026, increases the number of employees to which the current limitation applies regardless of whether the employees are “executive officers.” The memo notes these changes may be relevant to tax planning earlier than the effective date.

Please click here to read the memo.