On October 22, 2004, the President signed the American Jobs Creation Act tax bill. The bill contains several changes important to S corporation ESOPs and to equity compensation plans.
On October 6, the House approved a House-Senate conference committee's compromise language on the massive 650-page American Jobs Creation Act tax bill. The bill appears likely to pass the Senate either by mid-October or when Congress returns for a lame-duck post-election session.
The Government Accountability Office (GAO) has urged Congress and the Department of Labor (DOL) to tighten rules for proxy voting in defined contribution and defined benefit retirement plans.
Two bills to amend the treatment of U.S. corporate income earned overseas that have significant provisions affecting ESOPs and equity compensation continue to face an uncertain fate. The American Jobs Creation Act of 2004 (H.R. 4520) and the Jumpstart Our Business Strength Act (S.
The Financial Accounting Standards Board (FASB) has made a number of changes to its exposure draft on equity accounting. The most significant of these are:
According to a new study of 401(k) account balances, company stock now accounts for 16.4% of all 401(k) assets, about the same as last year, but off its peak of 19% in 1999.
ESOP advisors continue to report very strong activity in new ESOPs in closely held companies. As the baby boomer generation retires, many owners of closely held businesses will look for transition strategies, and ESOPs seem well positioned to benefit from this development.
The percentage of public and private companies with one or more of any kind of equity compensation plans that specifically offered stock options to nonexempt employees dropped slightly in 2004 compared to 2003, falling to about 13% of the 996 companies responding to the annual WorldatWork Salary
Responding to criticism, the FASB has changed its approach to vesting issues when accounting for stock options. In FASB's exposure draft on options accounting, options with graded vesting would be treated as if employers had issued multiple awards.
In a Mellon HRIS survey of 108 mostly public companies, 44% of which were technology companies and 19% life sciences companies, 49% of the respondents reported that they make options or similar awards available to most or all employees on an annual basis.
