Jurisdiction(s):
United Kingdom

Key definition

SEC definition

What does SEC mean? In legal practice, SEC means the US securities and exchange commission, the federal regulator of US securities markets and enforcer of federal securities laws. Created under the US Securities Exchange Act of 1934, and administering the Securities Act of 1933 among other statutes, the term is a descriptive shorthand in UK and Irish practice for that authority. The SEC is engaged when UK or Irish issuers, shareholders, banks or advisers access US capital markets, including registered offerings, Rule 144A/Regulation S transactions, US listings/ADRs on NYSE or Nasdaq, and mergers with a US securities element. Its regime drives registration, disclosure...

US IRC s 162(m): public company cap on deductions for executive remuneration: scope, covered employees, TCJA/ARPA reforms, affiliated groups, grandfathering, performance-based exception repeal and 409A coordination

Published by a LexisNexis Share Incentives expert

Practice notes

This PrACTice Note

This Practice Note outlines the framework for the Executive pay deduction cap under IRC, s 162(m), as revised by the Tax Cuts and Jobs Act (Pub. L. No. 115-97) (TCJA) and the American Rescue Plan Act (Pub. L. No. 117-2), s 9708. In general, IRC, s 162(m) limits to $1m the annual deduction a public corporation, or certain other reporting entities, may claim for remuneration paid to designated covered employees. Practitioners should grasp these Rules—including the full reach of the TCJA amendments (effective for tax years beginning after 31 December 2017) and ARPA’s expanded covered employee definition (effective for tax years beginning after 31 December 2026)—to help their public and reporting company clients craft senior executive pay packages that reduce unfavourable tax outcomes under IRC, s 162(m). This Practice Note is organised in the following sections:

Corporations subject to IRC, s 162(m)
Covered employees under IRC, s 162(m)
Transition rules for new public companies
Relief for grand-fathered arrangements
Performance-based compensation exception repeal...

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Web page updated on 22/05/2026

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