Performance-Based Compensation Under IRC § 162(m)

Section 162(m) of the Internal Revenue Code limits to $1 million a publicly-traded company’s deduction for compensation paid to any covered employee1 in a single year.  However, certain “performance-based compensation” is exempt from the $1 million limit. Summarized below are some of the key requirements for “performance-based compensation” under § 162(m) and the related regulations