Executive Compensation Issues in Corporate Transactions Involving Public Companies

This practice note provides guidance on the executive compensation issues that frequently arise in corporate transactions involving public companies. It explains how to handle the most important executive compensation issues in a typical merger, acquisition, or other corporate transaction. In addition to general transaction-related matters, tax-related considerations are discussed pertaining to parachute payments under I.R.C. §§ 280G and 4999 (Section 280G) and nonqualified deferred compensation under I.R.C. § 409A (Section 409A) and relevant considerations relating to the compensation deduction limitation for public companies under I.R.C. § 162(m) (Section 162(m)), which was significantly modified for tax years beginning after 2017 by the Tax Cuts and Jobs Act (Pub. L. No. 115-97) (the 2017 Tax Act).