Business Law Services

Executive Compensation and Tax

Attracting talented people is a key to success for any business. However, many young companies lack the funds to pay their employees market rate. An alternative to cash compensation is the award of an equity stake in the business. More established businesses may also wish to award equity stakes to their employees as a performance incentive. There are a multitude of equity compensation models available, depending on the structure of the company and its objectives. In order to achieve the desired result, these models require careful tax planning.

We regularly assist clients in developing equity compensation plans, including incentive stock option (ISO) plans, non-qualified stock option (NSO) plans, phantom stock and restricted stock awards, and restricted stock unit (RSU) plans, as well as the grant of profits-only interests in limited liability companies (LLCs).