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Section 162(m) in 2013 -- Updates, Pitfalls, and Getting It Right

Product Code - LGA103
Speaker(s): Regina Olshan, Skadden, Arps, Slate, Meagher & Flom LLP; Kyoko Takahashi Lin, Davis Polk & Wardwell LLP; Carol S. Silverman, Mercer LLC; Timothy F. Nelson, Skadden, Arps, Slate, Meagher & Flom LLP
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The onset of a new calendar year often finds compensation professionals at public companies formulating incentive compensation awards for senior executives. Often, these awards are intended to be “performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code, so as to avoid the imposition of the $1 million limit on deductible compensation that may otherwise be applied under Section 162(m).

This presentation provides practitioners with an overview of the general rules of Section 162(m), with a focus on the requirements imposed on performance-based compensation. It will focus on particular pitfalls that practitioners will want to avoid in creating 2013 incentive compensation programs and will include an update on recent relevant developments.

The faculty will also review Section 162(m) claims in recent shareholder litigation and the potential implications of these claims.

Educational Objectives:

• Understand the basics of Section 162(m), including updates on recent 162(m) guidance.
• Learn the practical considerations involved in structuring compensation arrangements which comply with the performance-based compensation exception under Section 162(m).
• Find out how to identify common Section 162(m) pitfalls which practitioners will wish to avoid in structuring compliant compensation programs.
• Learn about recent litigation activity involving Section 162(m) and the implications of such litigation.

Who would benefit from attending this program?

In-house legal practitioners in the areas of tax and employee benefits/executive compensation as well as human resource professionals.

Program Level: Intermediate. (It is assumed that attendees have some basic knowledge of Section 162(m) from practice or prior seminars.)

Credit Available: CLE. For more information, please click on the “CLE Credit” tab.

Regina Olshan, Skadden, Arps, Slate, Meagher & Flom LLP; Kyoko Takahashi Lin, Davis Polk & Wardwell LLP; Carol S. Silverman, Mercer LLC; Timothy F. Nelson, Skadden, Arps, Slate, Meagher & Flom LLP

Regina Olshan, Skadden, Arps, Slate, Meagher & Flom LLP
Regina Olshan is the global head of Skadden’s Executive Compensation and Benefits Group. Her practice focuses on advising companies, executives and boards on navigating the regulatory complexities of executive compensation and benefits. This includes tax laws (including laws governing deferred compensation, golden parachute arrangements and deduction limitation rules) and securities laws (including reporting and disclosure requirements and registration issues).

In addition, Ms. Olshan regularly advises public companies, boards, private equity clients and members of management on executive compensation and benefits issues arising in the context of mergers, acquisitions, spin-offs, initial public offerings, restructurings and other extraordinary corporate events, including private equity and leveraged buyout transactions. She also regularly advises large public companies and individual senior executives on the adoption, revision, and negotiation of executive employment and severance agreements.

Ms. Olshan is the author and editor of the Section 409A Handbook. She speaks and writes frequently on executive compensation issues, and has been quoted in various major publications on significant executive compensation issues of the day. Ms. Olshan was ranked in Band 1 in Chambers USA: America’s Leading Lawyers for Business for New York employee benefits and executive compensation. She also is listed in The Best Lawyers in America and The Legal 500 U.S.

Ms. Olshan earned a J.D. from Yale Law School and a B.A. from Harvard University. She is admitted to practice in New York and Connecticut.

Kyoko Takahashi Lin, Davis Polk & Wardwell LLP
Kyoko Lin is a member of Davis Polk’s Executive Compensation & Employee Benefits Group. She advises clients on executive compensation, equity-based incentives, deferred compensation, severance plans and other compensatory arrangements, with particular emphasis on issues arising in mergers and acquisitions transactions, initial public offerings, and new and joint ventures. She also advises on compensation-related corporate governance matters such as say on pay, employment and consulting arrangements, the applicability of securities and tax laws to executives and employers, the design and implementation of equity compensation plans and general employment-related matters.

Ms. Lin is a co-editor of Davis Polk’s external corporate governance blog,, and is the primary executive compensation and employee benefits contact for a number of the firm’s key financial institution clients.

Ms. Lin earned a J.D. from Harvard Law School and an A.B. from Harvard University.

Carol S. Silverman, Mercer LLC
Carol Silverman is a partner in the Washington Resource Group (WRG) of Mercer. The WRG is a national legal resource for Mercer consultants and clients on legislative and regulatory developments.

Ms. Silverman advises employers on corporate governance and regulatory issues, and executive and director compensation strategy and design, with an emphasis on employment and change in control agreements and equity programs. She also specializes in employee benefit issues that arise in the context of corporate transactions and initial public offerings.

Ms. Silverman is the author of a chapter entitled “Transaction-Related Incentives” in Paying for Performance – A Guide to Compensation Management (2002); and co-author of chapters entitled “Drafting and Negotiating Employment Contracts” and “Transparency and Accountability – The Changing Role of the Compensation Committee” in Executive Compensation. These latter two are now chapters in Bloomberg BNA’s Benefits Practice Resource Center’s Executive & Director Compensation Reference Guide, the former chapter now entitled “Negotiating Employment Contracts.”

Ms. Silverman earned a J.D. from Columbia University School of Law and a B.A. from Yale University. She is admitted to practice in New York.

Timothy F. Nelson, Skadden, Arps, Slate, Meagher & Flom LLP
Timothy Nelson is Counsel at Skadden, Arps, Slate, Meagher and Flom, LLP and a member of the Firm’s Executive Compensation and Employee Benefits Practice Group. He advises public and private clients, including numerous Fortune 500 corporations, on executive compensation and benefits issues. His practice also includes advising corporations and individual executives in the negotiation and preparation of compensation arrangements, including employment agreements, option plans and termination agreements.

Mr. Nelson earned a J.D. from St. John’s University, School of Law and a B.A. from Bates College. He is admitted to practice in New York and Massachusetts.

This program is CLE-credit eligible.

If you have further questions regarding a specific state or how to file for CLE credit, please contact Bloomberg BNA customer service at 800-372-1033 and ask to speak to the Legal and Business CLE Accreditation Coordinator.

Hardship Policy
Bloomberg BNA offers a hardship policy for attorneys earning less than $50,000 per year. If an attorney wishes to take advantage of this option, he or she must contact Bloomberg BNA directly. For attorneys who are unemployed or earning less than $35,000 per year, a full discount off the price of the program will be awarded upon written proof of hardship. Attorneys earning between $35,000 and $50,000 per year will receive a 50% discount off the price of the program. Any attorney working in the public service sector also qualifies for a special price. If you have further questions regarding the hardship policy or seek additional information, please contact Bloomberg BNA customer service at 800-372-1033 and ask to speak to Lindsey Pace, CLE Accreditations Coordinator, or email us at

For more information about Mandatory or Minimum Continuing Legal Education (MCLE) requirements, visit the American Bar Association website at