Jobs Bill Ties Equity Compensation to Pension Funding

H.R. 4213, the American Workers, State and Business Relief Act, requires that companies seeking amortization relief for defined benefit pension plans must make a contribution to their defined benefit pension plan equal to the amount over $1 million paid to any employee per year. With certain exceptions, all taxable compensation for a year is taken into account for purposes of the $1 million rule. Equity compensation counts, with two exceptions:

1. Restricted stock, stock options, or stock appreciation rights that are paid or granted under a binding written contract that was in effect on March 1, 2010, are not included.
2. Restricted stock with at least a five-year vesting schedule granted after February 28, 2010.