To attract and retain quality talent, companies need to offer competitive compensation arrangements. But as executive pay packages come under increasing scrutiny from government agencies, shareholders, policymakers and the general public, structuring executive compensation arrangements has never been more complex.
Pryor Cashman's Executive Compensation, ERISA + Employee Benefits Practice advises both executives and employers on a broad range of issues pertaining to executive compensation, employment and severance arrangements, the Employee Retirement Income Security Act of 1974 (ERISA), pension plan investments and employee benefits generally.
Working closely with attorneys in our corporate, investment management, labor and employment, private equity, and tax groups, we assist individual clients in achieving their executive compensation goals, avoiding problems and structuring tax-efficient compensation arrangements. We also represent a number of multiemployer plans, including both defined benefit (pension) and defined contribution retirement plans, health and welfare plans, and other employee benefit plans.
What We Do
Pryor Cashman's Executive Compensation, ERISA + Employee Benefits Practice provides key advice to both executives and employers in connection with employment arrangements, severance arrangements and the various forms of executive compensation and brings significant knowledge and experience relating to structuring executive compensation arrangements in a tax-efficient manner.
Our attorneys have represented numerous clients in leveraged and management buyouts, including many of the most prominent buyout firms, as well as management teams and individual senior executives. Consequently, our practice has obtained deep experience in dealing with the issues arising from using stock in privately held companies in connection with compensation arrangements.
Our lawyers regularly represent financial professionals, such as bankers, asset managers, hedge fund operators, CEOs, chairpersons and senior executives of public and private corporations, both domestic and foreign. We offer our clients strategic guidance in connection with negotiating, designing, implementing and amending employment, severance, partnership and other compensation arrangements. When negotiating agreements between employers and employees, we foster cooperation and collaboration, while avoiding unnecessary friction and bad will to obtain the best possible results for our clients.
Applying the depth and breadth of our experience, we help clients establish and structure equity compensation arrangements, including stock options, restricted stock, phantom stock, performance units, and profits interests. We have represented many prominent individuals and employers regarding the granting of equity in private companies to executives and other employees.
Additionally, our attorneys offer guidance regarding "qualified plans," such as 401(k) plans, profit-sharing plans, defined-benefit plans, pension plans, and Employee Stock Ownership Plans (ESOPs), as well as issues that arise in connection with welfare plans, including health insurance, life insurance, disability insurance and COBRA.
ERISA Guidance
Members of the Executive Compensation, ERISA + Employee Benefits Practice regularly offer guidance on a broad range of issues pertaining to the Employee Retirement Income Security Act of 1974 (ERISA), including:
- Setting up plan asset funds and complying with fiduciary/plan asset rules relating to asset investment and management
- Advising financial institutions on ISDA transactions and various other transactions with pension plans and other entities subject to ERISA
- Assisting in managing entities so that they do not become subject to ERISA by using various exemptions, such as the "25% test," the Venture Capital Operating exemption and the Real Estate Operating Company exemption
- Representing both borrowers and lenders, including banks and insurance companies, with respect to ERISA provisions in credit and other lending arrangements
Our attorneys are highly experienced in advising clients regarding ERISA and executive compensation in acquisitions and divestitures, including mergers, sales of assets, tender offers, spinoffs, split-offs, reorganizations and other transactions.
Tax and Regulatory Compliance
With broad knowledge of potential tax issues and the complexities of IRS compliance, our attorneys advise on equity and incentive compensation issues such as:
- Deferred-compensation arrangements
- Granting of “profits interests”
- Timing and methods of exercising options
- Vesting arrangements generally
To shield employers and key executives from unnecessary or unexpected tax liabilities due to a change in corporate control, our attorneys help structure compensation packages to ensure that any deferred-compensation arrangements qualify under Section 409A of the Internal Revenue Code.
