Oct. 05, 2020 - The reasonableness of executive compensation arrangements has long been a contentious issue. The COVID-19 pandemic has accelerated pre-existing trends and introduced new challenges, including increased concerns about the widening pay gap between executives and the average Canadian employee, as...
Finance Minister Provides Guidance on Stock Option Grandfathering
The newly elected Liberal government indicated in its election platform that it intends to increase taxes on employee stock option benefits by limiting Canadian resident employees from claiming the stock option deduction (i.e., the capital gains equivalent taxation) in respect of option benefits in excess of $100,000 annually. As discussed in our earlier note on this topic Will Tax Treatment for Canadian Stock Options Change? the extent of grandfathering for existing options has been a hot question since the election.
Minister Morneau indicated today at a press conference in connection with the release of the Economic and Fiscal Update that any changes with respect to the taxation of stock options would only take effect from the date they are announced, and would not affect options issued prior to that date. It appears that the government may be giving further thought to what steps to take with respect to this platform plank. The precise nature of any changes remains to be seen, but today's announcement indicates that currently outstanding options should not be affected and steps to avoid adverse tax treatment by exercising such options prematurely, with the disadvantages that would entail, appear unnecessary.
Oct. 05, 2020 - Davies Governance Insights 2020 provides a comprehensive analysis of the trends and developments that have shaped the corporate governance landscape and those that are expected to define the next decade. Against the backdrop of the COVID-19 crisis, this year’s report explores key issues...