Executive and equity compensation are crucial components of any employer’s strategy to recruit, retain, and motivate key employees. A successful compensation plan provides key employees with a stake in the success of their individual business units and/or the company as a whole. But a successful plan must also navigate a challenging and ever-changing regulatory environment of federal, state, and even multinational tax, pension, employment, and securities laws.
Nixon Peabody attorneys bring their experience to help clients achieve their business and compensation objectives, provide tax benefits, and minimize compliance risks. We have worked with and understand the special challenges facing a wide variety of employers, including multinational public companies, family held businesses, middle-market and emerging public and private companies, investment managers, start-up companies, and tax-exempt organizations.
We regularly work with clients and outside consultants on the design, documentation, and operation of executive compensation arrangements, including:
- Equity and quasi-equity programs for the issuance of stock options, restricted stock, restricted stock units, and stock appreciation rights;
- Cash-based incentive compensation arrangements, including programs designed to satisfy the performance-based compensation requirements of Section 162(m) of the Internal Revenue Code;
- SERPs (i.e., supplemental executive retirement plans) and deferred compensation arrangements, particularly those subject to the rules under Section 409A of the Internal Revenue Code;
- Executive and deferred compensation arrangements of tax-exempt organizations, subject to the complex rules of Section 457 of the Internal Revenue Code;
- Rabbi trusts and split-dollar life insurance;
- Executive severance and change in control plans, including those subject to the so-called “golden parachute” rules of Section 280G of the Internal Revenue Code; and
- Employee stock ownership plans (ESOPs), including both private company ESOPs and 401(k) investment funds that are intended to qualify for ESOP tax benefits.
We also assist individual executives in the negotiation and implementation of employment agreements to protect their interests, including provisions dealing with change in control, severance, and post-employment restrictions.