Final Regulations Clarify and Streamline Section 162(m) Exemptions

On March 31, 2015, the IRS issued final regulations clarifying two exemptions from Section 162(m) of the Internal Revenue Code (“Section 162(m)”), which generally prohibits deductions by public companies for compensation paid to “covered employees” (generally, the CEO and the next three most highly compensated individuals, excluding the CFO) in excess of $1 million.