Deferred Compensation Legislation Goes To Conference

The House and Senate have each passed a tax bill that includes significant changes to the tax treatment of nonqualified deferred compensation, and the bills are being referred to conference. If enacted, this legislation would require every business to do a thorough review of its employee and director compensation arrangements and its executive employment agreements and, in most cases, will require substantial revisions of these arrangements. Although the provisions of the bills are generally prospective, the new rules might also apply to amounts deferred after June 3, 2004, as well as to certain amounts deferred before that date.