OTHER NEWS - Dec. 21, 1995

IRS Issues Final Rules on Executive Pay: The Internal Revenue Service rules were issued under a law that prohibits companies from taking a tax deduction for executive compensation of more than $1 million a year. The rules, published in the Federal Register, originate from a provision in the 1993 Budget Reconciliation Act. That law prohibited publicly held companies from deducting compensation above $1 million for each executive, which includes salary and other forms of compensation, such as stock options. Performance-based compensation, meaning payments based on the attainment of corporate goals, isn’t subject to the deduction limit. The regulations clarify what types of compensation the IRS considers to be performance-based.