1. The little bird who suggested to us (see last month's ICYMI) that the Oregon Secretary of State would clarify new requirements for Oregon company articles of incorporation and articles of organization (effective January 1, 2018) sang true. See here. The guidance should help law-abiding Oregon companies avoid some significant, unnecessary pain.
2. In the wake of the Tax Cuts and Jobs Act (the acronym for which, disappointingly, doesn’t even spell anything), the SEC issued a statement, here, alerting public companies to guidance in Staff Accounting Bulletin 118, here, that covers treatment of deferred tax assets, among other things, and sets forth the SEC’s expectations for disclosure. The SEC also adopted new Compliance and Disclosure Interpretation 110.02, here, which gives public filers comfort that they have not already blown their obligation to report a material impairment to deferred tax assets under Item 2.06 of Form 8-K. Summaries and commentary on the guidance are here, here, and here. A few thoughts on other public company disclosures related to tax law changes are here.
3. Also of interest in the TCJA (see? terrible!) to corporate governance and public company types are changes to Internal Revenue Code Section 162(m), which addresses the deductibility of compensation paid to public company executives. The law was changed:
   • To include the CFO in the scope of employees covered. Previously, through a quirk in referencing the old definition of “named executive officers” in SEC regulations, the CFO slipped through the cracks.
   • To provide that, once a covered employee, always a covered employee, even if you are fired or die. Previously, the group of covered employees changed depending on who was a “named executive officer" in any given year.
   • To eliminate the performance-based compensation exemption from the $1 million cap on deductibility. Many companies previously designed performance compensation around this exemption.
   • To extend the $1 million cap to companies required to file SEC reports under Securities Exchange Act Section 15(d). Previously, only companies with publicly traded equity were subject to 162(m). This is important because those who issue public debt are now subject to the rule; public debt issuers must file Exchange Act reports for at least a year after the sale and then may exit the reporting requirements if they have fewer than 300 holders of record at year-end and make the right filings to terminate the filing obligation. That means some public debt issuers may jump in and out of the 162(m) limits, which is weird.

Binding contractual payments in place on November 2, 2017 are grandfathered. Modestly lengthier summaries of the changes to 162(m) are here and here. A collection of early proxy statement disclosures that describe the changes in 162(m) is here.

4. The TCJA also imposes a tax on “excess” compensation and “excess parachute payments” paid to a “covered employee,” which is any of the five highest-compensated employees of non-profit organizations . Like IRC Section 162(m), once you’re a covered employee, you stay a covered employee even if you fall out of the top five. The new law echoes provisions in IRC Sections 162(m) and 280(G) but, because it’s a non-profit that doesn’t otherwise pay taxes, the law works a bit differently – rather than prohibiting deductions or imposing a hefty excise tax on the employee, the non-profit must pay a 21% tax on compensation in excess of $1 million and on “excess” severance benefits (if severance benefits are more than three times annual base compensation, the tax applies to all benefits in excess of one times annual base compensation, even if three times the covered person’s base pay is not very much). We’re not entirely sure what the point is with this tax law change. According to the Charity Navigator, here, of the 4,587 charities in its 2016 report on non-profit CEO compensation, 10 rewarded CEOs with more than $1 million in compensation, including one-time payouts, and in the grand scheme of things, 21% of not very much is not very much. Of course, the laws will affect some entities one might not consider “traditional” non-profits, like health care providers (but compensation paid to doctors and veterinarians for providing medical services is excluded) and schools (look out, football coach). Of course, it is unconscionable that a non-profit executive should make anything resembling what a private company executive makes, so maybe that’s the point? (That’s sarcasm. It’s not unconscionable. We have no idea why people get worked up about it.) Summaries of the effect of the tax bill on nonprofits are here (compensation) and here (general).
5. To round out our coverage, some general summaries of the TCJA are here, here, and here.
6. Perhaps as notable as the Trump Administration’s push to fill federal courts with young conservatives has been its slow progress in filling administrative positions. Minor progress, at least, was made in late December when Robert Jackson and Hester Peirce were confirmed as new SEC Commissioners, filling two slots that have gone unfilled since before Trump took office. See here and here. Will that mean a renewed spate of SEC rule-making, say to implement lingering requirements of the seven-and-a-half-year-old Dodd-Frank Act? No. (See the Long-Term Actions agenda, aka the “don’t hold your breath” agenda, here, which among other things lists action on clawbacks, pay-for-performance disclosure, and stock hedging.)