Section 162(m) of the IRS Code places a $1 million-dollar limit on the amount of deductible compensation that a company can pay to their CEO, CFO, and other three most highly paid executives. Prior to the 2018, there were two very notable exceptions to the deduction limit – the exception for performance-based pay (including stock options) and the exception for commission-based pay. However, the Tax Cuts and Jobs Act of 2017, signed into law on December 22, 2017, repealed these exceptions, placing an effective cap on the amount a company can deduct for executive compensation at $1 million-dollars for a company’s CEO, CFO, and other three most highly paid executives. Given the significance of the change, for 2018 companies will have to evaluate their equity plans to identify and develop any needed changes resulting from the change in the tax code. Prior to the Tax Cuts and Jobs Act of 2017, Section 162(m) was one of the – if not the most – demonized tax code provisions and was often blamed for the rise in CEO compensation.