Republican Tax Plan May Leave Future of Stock Options in Flux
November 3, 2017
Stock options, a staple of executive compensation, could cease to exist under the Republican tax plan, which proposes to classify them as deferred pay, or money that’s already earned but received at a later date.
The GOP plan could “cause options to be extinct,” said Ian Levin, a partner at law firm Schulte Roth & Zabel.
That could be a sea change, since chief executive officers of S&P 500 companies got one-fifth of their pay in the form of options last year, on average, according to the Bloomberg Pay Index.
The plan “will change the way compensation works enormously,” Dan Morgan, a partner at Blank Rome LLP, said in a telephone interview, adding that it’s still “extremely incomplete,” and that there are various ways lawmakers can address these issues.
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"Republican Tax Plan May Leave Future of Stock Options in Flux," by Anders Melin was published in Bloomberg on November 3, 2017.