As a full-service consulting firm, A&M provides not only compensation advice, but also guidance on the tax, accounting, and legal implications involved with long-term incentive plan designs. Having tax and accounting expertise is crucial when designing and implementing an effective and efficient long-term incentive plan, as the design and operation can be significantly impacted by Internal Revenue Code requirements and accounting considerations.
- Tax sensitive: Working closely with our clients, we strive to provide the most tax efficient plans that meet the company’s unique needs while seeking to reduce tax liability.
- Accounting considerate: Other company stakeholders, such as Accounting and Finance, may be affected by plan design decisions; we incorporate feedback from these key areas to ensure the financial accounting treatment of a recommended plan design aligns with your company’s accounting priorities.
- Broad expertise: With an experienced team of lawyers and tax and accounting professionals who have worked together for many years, we can design and implement compensation plans for companies of all sizes across all industries. A&M works efficiently to ensure our clients receive developed plans that ensure all technical aspects have been considered and addressed.
Clients contact us when questions arise around Internal Revenue Code sections 280G (golden parachutes); 162(m) ($1 million deduction limitation); 409A (non-qualified deferred compensation); 83 (property for services); 422, 423, and 424 (qualified stock options and employee stock purchase plans); and accounting for stock-based compensation under ASC 718.
RELATED INSIGHTS
Alvarez & Marsal (A&M) brings a dedicated team of compensation and benefits professionals who assist the C-suite and boards in designing new long-term incentive (LTI) plans and maximizing the effectiveness of existing plans.
One of the key concerns from a compensation & benefits perspective upon a change in control (CIC) is the tax impact of the Golden Parachute rules under Internal Revenue Code (IRC) Sections 280G and 4999.
On December 16, 2019, the Internal Revenue Service (“IRS”) released proposed regulations (REG-122180-18) under Internal Revenue Code (“IRC”) section 162(m), which is the tax provision that generally imposes a $1 million annual limit on deductions by a publicly held corporation for compensation paid to covered employees.
In the years since Section 409A of the Internal Revenue Code was first implemented, most practitioners have become comfortable with the idea that a document failure may be remedied outside the formal IRS correction programs without resulting in Section 409A tax penalties if the correction is made before the deferred compensation amount vests.
Labor & Benefits: How to Prepare for a Successful Audit
August 5, 2025
A&M Senior Director Emily Miligan was recently a guest on the Weaver: Beyond the Numbers podcast and shared insights on how organizations can best prepare for a benefit plan audit.
Tax losses in share deals – Hidden value impacting purchase price negotiations?
August 4, 2025
In many M&A share transactions, tax losses may represent significant hidden value. But that value depends particularly on two key questions: Can the tax losses survive the transaction and can the parties mutually agree on a business plan substantiating the future usage of the potentially surviving tax losses? Our article outlines how jurisdiction-specific rules — especially Germany’s strict change-in-ownership regime — affect the usability of tax losses post-closing, whether tax losses can provide a shelter for historic tax risks and why tax losses impact purchase price negotiations.
EU Customs Reform: Impact on businesses
August 1, 2025
The EU is set to overhaul its customs regulations in 2028, with a key focus on modernising e-commerce.
Clarity on tax classification of foreign bail-in bonds
July 31, 2025
Proposed changes to Australia's tax treatment of bail-in bonds provide much-needed certainty regarding their debt/equity classification and tax law.
