Courses

    Nonqualified deferred compensation is undergoing dramatic changes as the design, operation and taxation of this employee benefit becomes governed by Section 409A, added to the Internal Revenue Code in 2004. With the publication of final 409A regulations in 2007, companies must rely on attorneys with 409A expertise to ensure that the structure of their executive compensation arrangements meets the new requirements while keeping their executives happy. Section 409A promises to do for nonqualified plans what the Employee Retirement Income Security Act of 1974 (ERISA) did for qualified plans 30 years ago. All deferred compensation plans must meet the new rules or suffer the consequences – immediate taxation and penalties imposed on the executives. This course will begin by reviewing the historical background of nonqualified deferred compensation and the legislative process that led to Section 409A. The principal focus of the course will be a detailed study of 409A itself, including the broad definition of nonqualified deferred compensation, election timing, “second” elections, timing and form of payouts, special rules for key employees, equity-based compensation, and application to fringe benefits, severance and employment negotiations. The course will also examine more recent legislative proposals and guidance from the Treasury Department and the IRS. The course will include problem-based discussions using real-life examples. Grades will be based in part on one short writing assignment during the semester.

Please note that the Fall version of this course is one credit. The Spring version of the course, which is two credits, covers essentially the same material in greater depth.