On February 26, 2014, U.S. House of Representatives Committee on
Ways and Means Chairman Dave Camp (R-MI) released the proposed Tax
Reform Act of 2014 (the Camp Proposal), which would simplify the
Internal Revenue Code and reduce corporate and individual tax
rates. However, to remain revenue neutral, the Camp Proposal would
eliminate many important tax incentives and would change the
landscape of executive compensation.
Changes to Nonqualified Deferred Compensation
Most significantly, the Camp Proposal would add a new Internal
Revenue Code Section 409B under which nonqualified deferred
compensation earned after 2014 would be taxed upon the elimination
of a substantial risk of forfeiture (typically, upon vesting).
Further, under the Camp Proposal, amounts earned before
2015 would generally be includible in income as of the later of:
(1) 2022 or (2) the year in which the amounts are no longer subject
to a substantial risk of forfeiture. If these provisions
