Executive Compensation and Non-Qualified Deferred Compensation Agreements

This area of the law addresses employers’ need to attract and retain board members, top executives and other key employees by providing them with an assortment of benefits, many of which are outside the scope of “qualified” plans, but still provide favorable tax deferral benefits. The tax code provisions under Internal Revenue Code Section 409A (“Section 409A”) impose significant and detailed requirements on many benefits offered to management and employees, with severe penalties for non-compliance.   These rules apply to a broad range of compensation and benefits, often extending to severance and salary continuation benefits, certain bonus arrangements, equity compensation, including restricted stock units and phantom stock awards. Due to the importance of attracting and retaining top talent and the complexity of these tax requirements, this practice area is of special significance to employers, their board members and key employees. We can help you by:

• Preparing “traditional” non-qualified deferred compensation arrangements, such as SERPs, restricted stock and other equity compensation plans stock option plans, and life insurance arrangements;
• Reviewing existing or proposed  employment agreements, change in control agreements or other benefit arrangements with top executives and other key employees—as well as director fee agreements—to ensure that they either comply with or are exempt from federal tax law provisions, including Section 409A and Internal Revenue Code Section 280G; and
• Advising and assisting with amendments or, if necessary, corrections to executive compensation and other benefits or non-qualified deferred compensation arrangements, if they fail to satisfy the restrictions.

Our executive compensation attorneys also work closely with our firm’s commercial and financial services attorneys to prepare and review disclosure policies and draft proxy statements and annual meeting materials related to executive compensation matters.