Proposed tax reform legislation includes several provisions that will affect the treatment of executive compensation.

Key Points:

..The current House and Senate bills remove the previously proposed Section 409B1 and therefore nonqualified deferred compensation and equity compensation will generally remain subject to taxation under currently applicable rules under Section 409A and Section 83.

..Otherwise, the current House and Senate bills are similar to the initial House bill, including with respect to its meaningful changes to the Section 162(m) US$1 million executive compensation deduction rules and tax-exempt executive compensation rules.