Plan for Your Exec’s Landing, Post-Merger: Golden Parachutes

The Golden Parachute Rules prohibit a corporation from treating as tax-deductible certain "excess parachute payments," also imposing a 20% excise tax penalty under I.R.C. Section 4999 on payments that are made to certain "disqualified individuals" receiving such payments. The I.R.C. Sections 280G and 4999 rules are triggered when an employee or independent contractor receives certain compensatory payments that, typically, are contingent on the consummation of a corporate transaction. This video describes the rules so you can prepare for the corporate event before it’s upon you.

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Related Content

• Section 280G Due Diligence Information Request
  Use this template for parties involved in a corporate transaction to collect information needed to identify and calculate "excess parachute payments" and determine whether compensation resulting from the transaction is subject I.R.C. Sections 280G and 4999 limits.  

• Section 280G Resource Kit
  Explore this resource kit which provides guidance on your questions regarding the interplay of I.R.C. Sections 280G and 4999 and includes change in control agreements and clauses to include in agreements to limit the negative tax impact of the Golden Parachute Rules.

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• State Abortion Laws Tracker After Dobbs v. Jackson Women's Health Organization (August 2022)
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Practical Guidance Updates
Featuring the latest updates from your Practical Guidance account.  

• Employee Benefits & Executive Compensation Key Legal Developments Tracker
  Stay informed on new developments.
  • Retirement Plans. IRS extends deadlines for amending a retirement plan or individual retirement arrangement (IRA) to reflect certain provisions of the SECURE Act, the Bipartisan American Miners Act of 2019, and the CARES Act. I.R.S. Notice 2022-33.
  • Health and Welfare Plans. On August 16, 2022, President Biden signs the Inflation Reduction Act of 2022. Impacts on employee benefit plans include: (1) a three-year extension (i.e., through 2025) of the ACA premium tax credit increase under the American Rescue Plan Act of 2021 (ARPA); (2) allows high-deductible health plans to cover any insulin dosage form of any different type before the individual meets the plan’s deductible (also capping the cost of insulin at $35 per month for Medicare enrollees); and (3) may reduce retiree Medicare supplemental plan spending by allowing government negotiation on prices of select Medicare medications. Pub. L. No. 117- __.
  • Health and Welfare Plans. Biden administration HHS issues regulations under ACA Section 1557 nondiscrimination rules that would largely restore the rules to the wider scope when initially finalized in 2016 before the agency significantly narrowed them during the Trump administration, including reimposing notice requirements, explicitly interpreting discrimination on the basis of sex to include discrimination for sexual orientation, gender identity, and pregnancy-related conditions, among other things. 87 Fed. Reg. 47824 (Aug. 4, 2022).
  • Health and Welfare Plans. HHS, DOL, and IRS issue guidance to clarify birth control coverage requirements under the preventive services rules of the ACA in connection with Executive Order 14076 addressing reproductive healthcare issues in the wake of the Supreme Court’s overturning of Roe v. Wade. FAQs on Affordable Care Act Implementation Part 54; see also HHS Press Release.
• Listen up! Dobbs L&E Impacts: Employers React to the Dobbs Opinion Podcast. Hear from Evandro Gigante, partner in Proskauer Rose’s Labor & Employment Law Department and co-head of its Employment Litigation & Arbitration group and Hiring & Terminations group. In this podcast, Mr. Gigante speaks about the employment impact results of the U.S. Supreme Court’s decision in Dobbs v. Jackson Women's Health Organization. See our growing collection of podcasts by navigating to the Practical Guidance Podcasts Resource Kit.
• Document alerts allow you to stay current on legal developments that affect your practice. Find out how to set up your document alerts.
• Check out the new Practical Guidance Author Center! Learn about the 1500+ leading attorney authors contributing to our 21 practice areas, and find out how you can Become a Practical Guidance Author.
• Share the Summer Associate Resource Kit: Employee Benefits & Executive Compensation with your firm’s summer associates to help them sharpen their research and writing skills, get the inside scoop on summer associate survival, and hit the ground running.
• The Practical Guidance Journal Summer 2022 Edition features wage and hour issues related to remote and hybrid work.

• New Practical Guidance Content
  • Dobbs v. Jackson Women’s Health Organization Resource Kit
  • Dobbs and Employee Benefits Issues Podcast
  • DOL Correction Program for Fiduciary Errors: The VFCP (Part 1) Video
  • DOL Correction Program for Fiduciary Errors: The VFCP (Part 2) Video
  • Medicare Secondary Payer Rules
  • Amendment and Limited Waiver for Executive Employment Agreement
  • General Release Extension Addendum to Separation Agreement
  • IRS Extends Deadline for Amending Retirement Plans and IRAs
  • Affordability Percentage for Employer Health Coverage Will Shrink in 2023

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