Taxation of Executive Compensation
We advise both publicly and privately held companies and their directors and officers on the various tax rules that apply to executive compensation, including the taxation of equity-based compensation and tax planning opportunities in the designing of benefit plans. We regularly work with our publicly held clients to structure performance-based compensation to be exempt from Section 162(m) of the Internal Revenue Code, which imposes a $1 million deduction limit on the compensation paid to each of the corporation’s most highly paid officers. We also advise our clients on the complex rules under Section 409A of the Internal Revenue Code, which governs the taxation of nonqualified deferred compensation, including the application of these rules to employment, separation and change-in-control agreements. In addition, we advise our corporate clients on the tax effects of the treatment of equity awards in corporate transactions and alternative approaches to the golden parachute rules under Sections 280G and 4999 of the Internal Revenue Code, which impose an excise tax on executives and a loss of deduction on corporations for certain payments and benefits that are contingent on a change in control.