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Posts Tagged ‘Equity based compensation’

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While the media is sensationalizing Intel CEO Brian Krzanich’s recent stock sales as unusual given the recently disclosed security weakness in Intel’s chips, ¬†a closer look reveals excellent tax planning, to the benefit of the company.

One of the key changes in the new tax law, a good one, is to expand the definition of compensation subject to the annual $1 million limit with respect to receiving a tax deduction.  Previously, only cash compensation was subject to the limit yet now all equity based compensation is also included, including stock options.

What this means is that if Intel’s CEO, for example, would have waited until after January 1st to exercise $25 million in options, the company would receive no tax deduction yet exercising prior to January 1 provides Intel a $25 million tax deduction.

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