A Panel Discussion on Due Diligence and Best Practices
Hosted by the Employee Benefits Committee and the Business Law Section's Mergers & Acquisitions Committee
Improperly handled golden parachutes can drag down both a seller and its executives with taxes, penalties, and administrative burdens. The corporation could lose the compensation deduction for excess parachute payments, while executives may be subject to an additional 20% tax over regular income taxes. Furthermore, the payor of the parachute payment must withhold the excise tax if the payment is wages. This CLE program will provide insight into recognizing a golden parachute problem during the deal negotiations so there are no surprise costs at the end of the day.
Learn when a payment made upon a corporate transaction meets the key elements for parachute payment treatment and how to structure change in control compensation to avoid some of the negative tax consequences. Panelists will examine the following key issues, among others:
- When does a change in control or a change in ownership of assets trigger the golden parachute rules
- How to calculate the "excess parachute payment"
- What IRS is looking for in audits of change in control payments