The NASPP Blog

Election season is over and with the a Republican president and majority in Congress, new questions are emerging about what changes may occur in the coming year. Are you wondering how a new administration may impact stock compensation? Read more in today’s blog to find out.

Repeal of Dodd-Frank?

The day after the election, Cydney Posner of Cooley posted a blog (“Undo Dodd-Frank?” – November 9, 2016) that explored the possibility that certain aspects of Dodd-Frank could be on the table for repeal when the new government is in session/post inauguration. Keep an eye out for a variation of the Financial Choice Act to find its way back to Congress. Posner describes the Act as:

“The bill, sponsored by Jeb Hensarling, Chair of the House Financial Services Committee, was framed as a Republican proposal to reform the financial regulatory system necessary to undo the burdens of Dodd-Frank, which were characterized as a distraction from the SEC’s basic statutory responsibilities. In addition to taking aim at much of Dodd-Frank, among other things, the bill places a heavier burden on proxy advisory firms, regulators and regulations generally and eases some other regulations. Although the bill was never expected to make much progress this year, the NYT suggested that the bill may “help shape the Republican agenda in the next term.” The bill’s chances of becoming law have, well,… to say that they have substantially improved doesn’t quite do the situation justice.”

Aspects of the bill that may impact stock compensation include repeal of the CEO pay ratio disclosure rules, which are not even implemented yet. It’s unclear where this bill will go or how it may be re-introduced, but it certainly is something to keep on the radar.

Tax Rates

President-elect Trump made tax reform a cornerstone of his campaign platform, and his tax plan identified several changes, one of which was a reduction of the top Federal tax rate from 39.6% to 33%. Republican members of Congress also have drafted similar proposals. Most information that I’ve come across in the days post election suggests that tax reforms is not an “if” what rather a “when” and “what” scenario, with good potential for the changes to be significant. What that means in terms of the details is to be determined, but change is likely.

Congress doesn’t reconvene until early January 2017, and Inauguration Day is January 20, 2017, so nothing will happen before then. But I expect it won’t be long after that before we start seeing some of the details around these scenarios to begin to take shape.

-Jenn