Employee benefit gains

Part II — Synthetic Equity Plans- Important Design Considerations.

Topics: Employee benefit gains, Qualified Plans

In establishing an effective synthetic equity program, employers must ensure that the benefits are provided at a time that meets employees’ expectations and the employer’s needs. From a tax perspective, however, the timing of payments must be considered in light of the requirements of Internal Revenue Code (“Code”) §409A. Valuation is also crucial, and relevant…

Equity-Based Incentive Compensation- Actual vs. Synthetic Equity Part I – An Introduction

Topics: Employee benefit gains, Qualified Plans

Stock options and restricted stock have been common compensation tools for several decades and can be effective in attracting, retaining, and motivating employees to render the desired performance. These approaches, however, may have unexpected tax consequences for the employees and may cause the company to give up an unacceptable degree of control.