Page 752 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Appendix B. Selected Laws 737

1954 Internal Revenue Act
• Major rewrite of the 1939 Internal Revenue Act removing out-of-date portions while adding
Sections 104, 105, and 106 covering group health and disability plans, as well as Sections 401
and 404 for pension plan qualification requirements and tax deductibility
• While employer contributions to health plans are tax deductible, they are not taxable as income
to employees
1958 Federal Welfare and Pensions Disclosure Act
• Pension and welfare plan participants must be provided plan information upon request
• An annual report on the plans must be filed with the government
1959 Landrum-Griffin Act
• Suppressed labor union racketeering and secondary boycotts
• Required filing of financial reports by union and employers
1962 Self-Employed Individuals Tax Retirement Act
• Established Keogh (also known as HR–10) retirement plans for self-employed
1963 Equal Pay Act
• Required that men and women performing work requiring equal effort, responsibility, and skill
be paid equally
• Codified the benefit principle of equal costs or equal benefits
1964 Revenue Act
• Tax rates scaled back, with a maximum tax of 77% on annual income over $400,000
• Introduced a new form of statutory stock option (Section 422):
– Option price could not be lower than 100% of FMV at time of grant
– No tax until sold if held for more than three years after exercise, then again taxed as
capital gain
– Option could not be exercised if earlier option at higher price outstanding
– Term of grant not to exceed five years
• Introduced a statutory stock purchase plan (Section 423):
– Purchase price cannot be less than 85% of FMV at date of grant or time of purchase
– If set at 85%, the grant may run for up to five years; if not, it may not exceed 27 months
– The grant may not exceed $25,000 a year per employee
1964 Civil Rights Act
• Title VII prohibited pay and other employment actions based on race, color, sex, religion, and
national origin
• Equal Employment Opportunity Commission charged with compliance

1965 Tax Reform Act
• Maximum tax rate lowered to 70% on income over $200,000
1965 Social Security Act
• Established Medicare and Medicaid
1966 Medicare Act
• Provided health care and coverage for disabled and retired employees
1967 Age Discrimination in Employment Act
• Prohibited employment discrimination between ages 40 and 65

1968 Omnibus Crime Control Act
• Introduced the witness protection program