Tax law changes, including adjustments to the SALT deduction and alternative minimum tax rules, can significantly affect the tax consequences of equity compensation for executives, making it important for individuals to consult with tax advisors and for companies to assess the tax efficiency of their compensation plans. The following article, by Greta E. Cowart of Jackson Walker LLP, is shared from Insights and JW News at Jackson Walker LLP.
Tax law is an interrelated web of complex rules, and changes in one rule can impact compensation strategies for management and executives even if the change is to individual income tax calculation rules. Executives should consult with their tax advisors regarding the best strategy for their equity compensation awards and personal income taxes. Companies should consider whether their equity compensation plans are structured to provide management with the most tax efficient incentives to achieve the company’s goals.
The increase of the state and local tax (“SALT”) deduction may impact the imposition of the alternative minimum tax on executives when, beginning in 2026, the SALT deduction may lower taxable income, but the same deduction increases income subject to the alternative minimum tax, making the exercise of an Incentive Stock Option more likely to trigger alternative minimum tax for the individual. When an Incentive Stock Option is exercised, and the stock is held and not sold, it generates an addition to the income subject to the alternative minimum tax for the individual. The SALT deduction phases out based upon income, so it may not be a factor for some employees but may impact others. So, an individual who has a significant income inclusion, for example, from an RSU vesting or non-qualified stock option exercise, an early Incentive Stock Option sale, or a cash bonus or other taxable income—may see their SALT deduction phase out to zero from the increased income from such actions.
When Restricted Stock Units vest or Nonqualified Stock Options are exercised, the additional compensation from such awards will cause some deductions, such as the SALT to phase out or be eliminated. If an individual has a significant SALT deduction that is not phased out and exercised an Incentive Stock Option in the same tax year, the potential impact of the Alternative Minimum Tax needs to be considered.
Employee Benefit Plans of Tax-Exempt and Governmental Employers 2025 provides in-depth analysis on the key legal and regulatory developments facing tax-exempt and governmental employers that you won’t get in any other program! Experienced practitioners, government officials, and tax authorities will offer practical strategies that you can bring to your clients for their plan provisions and employer operations.
Designed for those handling plans for medium and large employers, this comprehensive, two-day webcast delivers invaluable expert insights from experienced practitioners regarding the complex issues that often accompany establishing plan provisions and operations, as well as considerations for human resources and employment agreements.
Benefit from updates and insights across a range of timely topics, including:
The latest guidance related to SECURE Act 2.0
Differing rules for governmental and church plans
Executive employment agreements for tax-exempt employers
Legislative update on employee benefits laws
Health and welfare and fringe benefit update
Ethical issues in representing employers and plan sponsors
Litigation update on benefit plan risks
ERISA plan developments
And so much more!
Find out everything you need to know about the myriad plans and special issues facing employers, including recent changes and new legislation on the horizon. Keep up with the continuous developments impacting the benefit plans of medium and large employers in the nonprofit and public spaces. Register today!
Step into the center of today’s most important conversations about multidistrict litigation at MDL in Motion: Evolving Practices, Emerging Leaders, and Reform, in partnership with The American Law Institute and the Center on Civil Justice at NYU School of Law, on September 12, 2025, in person in New York or via live webcast.
MDL in Motion brings together an unparalleled lineup of renowned judges, influential thought leaders, and rising professionals to explore the evolution, challenges, and future of multidistrict litigation (MDL) practice.
Through dynamic panels and candid discussions, gain behind-the-scenes perspectives on judicial decision-making, the pivotal role of special masters, the next generation of MDL leadership, and the ongoing push for reform.
Program highlights include:
JPML Decision-Making: Behind the Bench—MDL judges discuss the factors that influence their rulings, including case volume, legal strategy, and judicial discretion.
The Role of the Special Master—Kenneth R. Feinberg explores the critical decisions and challenges faced by Special Masters in resolving complex disputes.
Emerging Leaders in MDL—Rising professionals share innovative strategies and insights on navigating the evolving MDL landscape.
MDLs from Inception to Today’s Mega Cases—A conversation with renowned expert Arthur R. Miller on the origin or multidistrict litigation to its place at the heart of today’s most complex and high-stakes cases.
MDL Management: Coordination, Efficiency, and Oversight—Learn best practices for managing MDL cases, ensuring coordination and fair outcomes in large-scale litigation.
MDL Reform: Balancing Efficiency and Fairness—Experts discuss proposed MDL reforms and their impact on fairness and efficiency in mass litigation.
And so much more!
Hear from the judges, leading litigators, and special masters setting the standard for MDL practice, as they share practical litigation strategies, candid insights, and forward-looking perspectives you won’t find anywhere else.
Mingle with peers and MDL leaders and enhance your professional network for years to come!
Registration—whether in person or virtual—includes admission to our exclusive Welcome Reception on September 11th. This is your chance to connect one-on-one with MDL leaders, exchange ideas with peers from across the country, and expand your professional network in a relaxed, collegial setting. Engage in meaningful conversations that can spark collaborations, deepen your expertise, and give you insider perspectives before the main program begins.
Whether you are an experienced litigator, a policymaker, or a rising leader eager to shape the future of complex litigation, this is your opportunity to connect directly with the voices driving change, sharpen your expertise, and stay ahead in one of the legal profession’s most challenging and evolving fields. Register today!
In the world of remote work, the key is not to prioritize what’s on your schedule, but to schedule your priorities.
Stephen Covey
Over the summers of 1973 and 1974, I had the privilege of working as a laborer in the storied Homestead Works of U.S. Steel Corporation, the first business entity in the U.S. with a billion dollars in capitalization. These highly prized summer jobs for students paid as a base rate more than today’s minimum wage. My father, Big Bobby to my Little Bobby, was a Pittsburgh robbery detective at the time who had been assigned to solve a crime against the superintendent of the Homestead Works. So, my dad sent me to the employment office in Homestead where I was immediately hired for the summer. This was called “knowing somebody” back in the day instead of networking. Big Bobby did not solve the crime. As a beneficiary of the misfortunate of the superintendent, Little Bobby challenged the universality of the old adage that crime does not pay.
My entry to the workplace was as a full-time employee on probation for the first 30 days, delineated by a piece of masking tape across the mandatory hard hat. I was part of the unit covered under the collective bargaining agreement with union dues deducted after successful completion of probation. Summer hires were just like everybody else in our metatarsal boots and orange helmets, working any of three shifts paid by the job classification, just like the career co-workers.
A key takeaway for me was that work was what you did 40 hours per week in a confined and unique environment separate and distinct from daily life. The workplace was world I entered and left via the City-Farm Lane gate five times a week. When I was there, I was fully present and engaged in my duties and in the collegiality that develops with co-workers despite cultural, political, religious and other profound differences. We arrived 45 minutes early to allow those leaving time to shower and dress and be at the gate five minutes before the whistle blew and the gate opened. When waiting to exit, we “hid” off to the side so that the supervisors did not issue write-ups for us not being at our posts. The open secret was that management did not look, and a pact was kept that allowed uninterrupted production. Looking back, I realized these few minutes were a mental transition period, a decompression “tunnel” where we moved from work to play, from work to real life. Once the whistle sounded, I never thought about what was happening at the mill until I crowded past the gate with the dozens of others at the start of my next shift.
Once I became a lawyer, that all changed, especially in 1979 when I opened my solo practice within two years of bar admission. Thoughts of cases and work projects intruded into my mind at odd times, including the occasional dream or waking moment. It took discipline to compartmentalize to attempt to be 100% present in the evenings and weekends. Of course, there were activities, including eating, drinking, sports, movies, and card and board games that created unintentional force fields or thought barriers of separation to shield me from work. When I left the office empty-handed without files, just like the mill, nothing followed me home. Unless someone called me at home. That was an understood no-no unless I gave prior authorization, which was rarely granted. Now it was up to me to control my own thoughts to avoid wandering to my cases.
Of course, this dichotomy between working only at the office and working after normal business hours is a relic of the crush of technology. First fax machines, then computers with modems that could reach into the home, then cellphones and now, the ubiquitous smartphone. Sometimes I wonder why they are called “smart.” Is that a mockery or an irony played on the users?
So, now we can work anytime, anywhere. Many lawyers can perform many of their job responsibilities rarely being in the same room with another human being.
Don’t miss your chance to register for MDL in Motion: Evolving Practices, Emerging Leaders, and Reform, in New York at NYU School of Law. Attend in-person or live via webcast on September 12, 2025. To learn more about this program and to register for the in-person course or live webcast, click here.
Working Remotely
Almost all law firms, legal departments, government agencies and solo practitioners have converted to a hybrid model of working partially from home or while traveling. Social scientists call this Digital Nomadism. It’s most effective with a laptop and remote file access, but also smartphones, tablets and guest access to devices and networks. I doubt there is a lawyer or support professional who has not squeezed in a few hours of work while on the road for leisure or as an extension to travel or other obligations. I have conducted numerous arbitration hearings, mediation sessions and meetings with counsel where participants are in coffee shops, automobiles or on hotel balconies overlooking bodies of water. It is all fine with me provided the visuals, access to document sharing, and audio are effective and the disruptions minimal. Recent research indicates that hybrid working represents the “best of both worlds,” offering workers greater work-life balance without the concern of being isolated from colleagues. See Choudhury, Prithwiraj, Tarun Khanna, Christos A. Makridis and Kyle Schirmann. “Is Hybrid Work the Best of Both Worlds? Evidence from a Field Experiment.” Harvard Business School Working Paper, No. 22-063, March 2022. A report on a survey of over 2,000 lawyers conducted by the American Bar Association summarized the results:
Significantly, the overwhelming majority of lawyers reported that working remotely did not adversely impact the quality of their work, productivity, or billable hours. Remote work brought other advantages as well, such as an increased ability to balance work and family obligations, especially for women lawyers. On the other hand, for many lawyers, remote work increased their feeling of social isolation and decreased the quality of their relationships with co-workers.
See Liebenberg, R. and Scharf, S., “Where Does the Legal Profession Go From Here?” ABA Practice Forward Report, 2022.
These findings do not surprise me and are consistent with the social science research that has been the subject of many of my prior articles.
Nationwide injunctions, also known as universal injunctions, have recently been at the forefront of legal and political discussions across the country. These court orders extend relief beyond the parties in a case, often halting federal policy nationwide.
The judicial orders have sparked controversy over the balance between judicial authority and executive action. The issue has gained more attention as courts more frequently consider major cases involving hot topic issues.
Don’t miss your chance to register for MDL in Motion: Evolving Practices, Emerging Leaders, and Reform, at NYU School of Law in New York, NY. Attend in-person or live via webcast on September 12, 2025. To learn more about this program and to register for the in-person course or live webcast, click here.
In a recent episode of the American Law Institute’s Reasonably Speaking podcast, linked below, listen to a timely and incisive discussion on nationwide injunctions. The conversation explores the constitutional debates, practical consequences, and political implications of these powerful judicial tools. Hear as the panel examines whether the nationwide injunction is a necessary check—or a threat to judicial legitimacy.
