Equity and Executive Compensation

IRS Issues Initial Code Section 83(i) Guidance – Mostly Good News

J. MARC FOSSE, December 10, 2018      The IRS has provided initial guidance in Notice 2018-97 (the “Notice”) about certain statutory requirements for private corporations granting options and restricted stock units (RSUs) which they intend to treat as qualified equity grants under section 83(i) of the Internal Revenue Code (the “Code”). If an option or RSU […]

Tax-Exempt Organizations Face New Tax Penalty on Excess Compensation — Due Diligence and Minimization

J. MARC FOSSE and SERENA AISENMAN, February, 2018   The “Tax Cuts and Jobs Act” added a new 21% tax penalty on “excess compensation” paid by most tax-exempt organizations to their top-five highest compensated employees. The penalty is found under section 4960 of the Internal Revenue Code (the “Code”) and it ties the amount of the […]

New Section 83(i) of the Internal Revenue Code — Qualified Equity Grant Programs Permit Employees to Elect to Defer Income Taxes on Stock Options or RSUs

J. MARC FOSSE and ANGEL L. GARRETT, January 11, 2018   New section 83(i) of the Internal Revenue Code (the “Code”) permits eligible private corporations1 to adopt qualified equity grant plans for issuing stock options or restricted stock units (RSUs) to eligible employees to obtain “qualified stock” (as defined below) in exchange for the performance […]

Disability Claims Regulations Delayed to April 1, 2018

YATINDRA PANDYA and JAHIZ NOEL AGARD, December, 2017   On November 24, 2017, the Department of Labor (DOL) delayed the applicability of the final rule which revises the regulations governing disability benefit claims (the “Final Rule”) to April 1, 2018, from the original January 1, 2018, effective date. Published in the Federal Register on December 19, […]

Tax Reform Provisions Affecting Employer-Provided Compensation and Benefits

J. MARC FOSSE, December 27, 2017   The Tax Cuts and Jobs Act (the “Act”) recently signed into law affects many employer-provided benefits and employee compensation, beginning as soon as next week. This alert highlights the affected benefits and provides a short summary of how the Act will change the tax treatment of those benefits and […]

Section 409A Relief for Tax Payments from Section 457A Plans

J. MARC FOSSE and YATINDRA PANDYA, December 20, 2017   On December 8, 2017, the Internal Revenue Service (the IRS) released Notice 2017-75 (the “Notice”), which provides limited relief from cer­tain penalties under section 409A of the Internal Revenue Code (the “Code”) for tax payment distributions from a Code section 457A nonqualified deferred compensation arrangement (a […]

UPDATE: Latest Senate Markup of the “Tax Cuts and Jobs Act” Strikes Provisions that Would Have Drastically Changed Nonqualified Deferred Compensation Arrangements, While Retaining Revisions to 162(m) Limits on Executive Pay

J. MARC FOSSE, November 16, 2017   The November 14, 2017, markup of the Tax Cuts and Jobs Act (the “Act”) released by the Chairman of the Senate Finance Committee deletes section III.H.1 of the November 9th Senate proposal. That section would have replaced section 409A of the Internal Revenue Code (the “Code”) with Code […]

Executive Compensation Programs Are Still on the Chopping Block in Senate Version of “Tax Cuts and Jobs Act”

J. MARC FOSSE, November 13, 2017   Shortly after the House version1 of the Tax Cuts and Jobs Act (the “Act”) was amended to delete all provisions relating to sweeping changes to executive compensation programs, the initial Senate proposal for the Act was released, putting these provisions right back on the table. Although the Act […]

Nonqualified Deferred Compensation Plans May Need to Be Updated for Revised Claims Regulations Relating to Disability Determinations

J. MARC FOSSE, August 2017   While nonqualified deferred compensation plans (“Nonqualified Plans”) are generally exempt from most of the substantive provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), Nonqualified Plans are still subject to ERISA’s enforcement provisions, including claims regulations implementing section 503 of ERISA. For that reason, a Nonqualified Plan must […]

Tax-Exempt Entities and State/Local Governments Have New Flexibility in Designing Annual and Long-Term Bonus Incentive Plans

JAHIZ NOEL AGARD, October 2016 This client alert discusses how tax-exempt entities and state/local governments (“eligible employers”) can take advantage of the new rules in the Internal Revenue Service (“IRS”) proposed regulations (issued on June 22, 2016) regarding Internal Revenue Code (“Code”) Section 457(f) (the “Proposed Regulations”) to design more flexible and easier-to-administer annual and […]

Newly Issued 457(f) Proposed Regulations Clarify Rules for Nonqualified Deferred Compensation Provided by Non-Profit and Governmental Entities

J. MARC FOSSE, July 2016 The long-awaited Internal Revenue Service (“IRS”) proposed regulations regarding implementation of Section 457(f) of the Internal Revenue Code (“Section 457(f)”) are finally here. The proposed Section 457(f) regulations (the “Proposed Regulations”) provide some guidance that was expected, but also provide surprising new developments that tax-exempt non-profit and governmental1 employers (“eligible […]

Reproposed Regulations on Financial Institution Incentive-Based Compensation Expand Definition of Covered Institutions and Require Significant Changes to Incentive-Based Compensation Arrangements

J. MARC FOSSE, May 2016 — Section 956 of the Dodd Frank Act requires six different federal agencies (the “Agencies”) to jointly issue rules regulating incentive-based compensation at covered financial institutions by (1) prohibiting incentive-based compensation arrangements that encourage inappropriate risks by providing excessive compensation or that could lead to a material financial loss and […]

Discourage Costly Stockholder Derivative Lawsuits by Obtaining Stockholder Ratification of Reasonable Limits on Non-Employee Director Equity and Cash Compensation

J. MARC FOSSE, December 2015 — For members of a board of directors who are also officers of the corporation, complying with securities and tax laws will also generally require that their compensation be approved by independent and disinterested non-employee members of the corporation’s board. However, similar governance standards are not required by law when […]

April 15 Deadline is Fast Approaching to File Protective Refund Claims for FICA Taxes Paid on Certain Severance Payments

Employers must file a protective refund claim with the Internal Revenue Service by April 15, 2014, if they wish to preserve their right to a refund of Federal Insurance Contribution Act (“FICA”) taxes paid on certain severance payments made during the 2010 tax year to employees who were involuntarily terminated. As discussed in our September […]

December 31, 2012, Deadline for Correcting Section 409A Document Failures for Payments at Separation from Service that are Contingent on Submission of a Release of Claims

In Notice 2010-80, the Internal Revenue Service (“IRS”) provided a remedial period until December 31, 2012, to correct nonqualified plans or agreements subject to Section 409A of the Internal Revenue Code (“Section 409A”) that pay compensation at separation from service, but base the timing of the payment on when a release of claims is submitted. […]

Page 1 of 3 1 2 3