Taxation of Executive Compensation

Credits: 2.00
Faculty: Patricia Geoghegan

Prerequisite: Federal Income Taxation

This course will explore the Federal income tax consequences (to both employees and employers) of the various forms of executive compensation and employee benefits, including cash bonuses, equity-based compensation (including statutory and nonstatutory stock options, restricted stock and "phantom" equity awards), deferred compensation and retirement arrangements (including 401(k) plans and Roth and other IRA's). We will examine the constructive receipt doctrine, the taxation of restricted property and stock options under Section 83 of the Internal Revenue Code, new Code Section 409A (which nominally deals with deferred compensation, but in fact constitutes a paradigm shift in the taxation of compensation to cash-basis taxpayers), the application of Section 280G to "golden parachute" payments, and the disallowance of deductions under Code Section 162(m) for certain compensation in excess of $1 million. The course will focus on the application of the Code and regulations to employment agreements, change-in-control arrangements, equity plans and "gross-up" arrangements. FICA and withholding rules will also be covered, as will the special rules applicable to the deferred compensation of employees of tax-exempt organizations. The grade in the course will be based on a final examination.