Company: EGP
Filing Date: 2025-04-11
Form Type: DEF 14A
Source: 0000049600-25-000055
Chunk: 37

Company: EASTGROUP PROPERTIES INC
Filing Date: 2025-04-11
Form: DEF 14A
Chunk 37
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#### 56EastGroup Properties
Proposal 3: Non-Binding, Advisory Vote on Executive Compensation

#### Tax and Accounting Considerations

#### Deductibility of Executive Compensation
Section 162(m) of the U.S. Internal Revenue Code of 1986 (the “Code”), as amended by the Tax Cuts and Jobs Act of 2017 (the “TCJA”), limits to $1 million the deduction that publicly traded corporations may take for compensation paid to “covered employees” of the corporation. Under a series of private letter rulings issued by the Internal Revenue Service (the “IRS”) prior to the enactment of the TCJA, compensation paid by an operating partnership to executive officers of a REIT that serves as its general partner was not subject to the limitation on deductibility under Section 162(m) to the extent such compensation was attributable to services rendered to the REIT’s operating partnership. In December 2020, the IRS issued final Treasury regulations under Section 162(m) (the “Final Regulations”) that overturn the guidance in the private letter rulings and apply Section 162(m)’s $1 million deduction limit to a REIT’s distributive share of any compensation paid by the REIT’s operating partnership to certain current and former executive officers of the REIT. The guidance under the Final Regulations applies to all compensation deductible in tax years ending on or after December 20, 2020 other than compensation paid pursuant to a written binding contract in effect on December 20, 2019 that is not subsequently materially modified. This guidance represents a significant change in IRS guidance regarding the deductibility of compensation for REITs and, to the extent that compensation paid to our executive officers does not qualify for deduction under Section 162(m), a larger portion of shareholder distributions may be subject to U.S. federal income taxation as dividend income rather than return of capital.

#### Accounting for Stock-Based Compensation
We follow the FASB ASC Topic 718 for our stock-based compensation awards.

Compensation Committee Interlocks and Insider Participation

As noted above, the Compensation Committee is comprised of three independent directors: Messrs. Bolton, Colleran and Fields, each of whom served on the Compensation Committee for the entirety of the year ended December 31, 2024. No member of the Compensation Committee is or was formerly an officer or an employee of the Company or had any other relationships with us requiring disclosure herein. No executive officer of the Company serves as a member of the board of directors or compensation committee of any entity that has