Extract
New Executive Compensation Rules.
What you need to know about Section 409A!
Section 409A, which was added to the Internal Revenue Code effective January 1, 2005, creates an entirely new tax regime with respect to executive compensation arrangements and creates significant new penalties for violations of these new rules. Proposed regulations under Section 409A were issued September 29, 2005. These proposed regulations, for the first time, allow us to provide in-depth counsel to you regarding these new rules. One consequence of these new rules is that many existing executive compensation arrangements will need to be amended prior to the end of 2006. These arrangements, however, need to be administered in compliance with the new rules now and inadvertent violations may be very costly to executives. In addition, certain planning opportunities are available only if implemented prior to December 31, 2005. The Foley Employee Benefits Practice Group has prepared this article in a question and answer format to assist you in complying with these new requirements. However, the proposed regulations are quite detailed and need to be consulted di...See the full content of this document
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