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§409A Strategies: The Basics and Beyond


Product Code - TMAU02
Speaker(s): Michael Riley, Antoinette Pilzner
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Section 409A casts a large shadow over nearly all executive compensation arrangements, including some areas, such as severance pay and post-termination expense reimbursements, which may not have commanded significant attention in the past. Both employers and executives now must consider its broad-reaching impact on the negotiation and design of those arrangements. And because the onerous additional taxes and interest resulting from failing to comply with §409A fall exclusively on the executive, the executive (and the executive’s advisors) must make sure that compensation arrangements are properly committed to writing and administered as written.

This webinar focuses on the scope of executive compensation arrangements governed by §409A’s requirements and limitations on nonqualified deferred compensation arrangements and how those statutory and regulatory provisions affect the negotiation and design of executive compensation arrangements.

Presentation Objectives:

The objectives of this 90 minute webinar include providing participants with a conceptual understanding and practical application of the following:

1. Identifying “deferred compensation” in executive compensation arrangements, including employment agreements

2. Identifying exceptions to “deferred compensation” under §409A

a. Short-term deferrals

b. Severance pay

c. Expense reimbursements

3. Section 409A requirements for nonqualified deferred compensation arrangements

a. Advance election to defer

b. Advance election of payment form and timing

c. Permissible payment events

d. Permissible changes in payment form and timing

4. Negotiation considerations for executives

a. Change in Control

b. Indemnification

c. Separate plans and payments

d. Good Reason events

5. Negotiation considerations for employers

a. Vesting of deferred compensation

b. Lump sum v. installment payments

c. "Funding"

Upon completion of this program, participants will have a basic understanding of:

1. various exclusions available for CODI

2. the operation of the deferral election

3. the application of the deferral election to partnership debtors

4. the IRS guidance on certain questions that were identified at the time the legislation was enacted

Michael Riley, Antoinette Pilzner

Michael Riley is with McDonald Hopkins LLC and has worked with executives, professionals and entrepreneurs for over 20 years in the areas of compensation and benefits, succession planning and estate planning. Mike’s focus areas include designing nonqualified deferred compensation arrangements to meet business objectives, negotiating executive employment agreements, and estate planning with retirement benefits.

Antoinette Pilzner is with McDonald Hopkins LLC and focuses her practice in the areas of ERISA, employee benefits and executive compensation. She has 15 years of experience in establishing, revising and terminating benefit plans and executive compensation programs to address business needs and changes in the federal law. Antoinette, who is also a certified public accountant, frequently counsels clients on administering plans and programs to comply with ERISA and the Internal Revenue Code. From 2006 through 2009, she served on the Employee Benefits Committee of the U.S. Chamber of Commerce. From 2002 to 2005, she served on the Department of Labor’s Advisory Council on Employee Welfare and Pension Benefit Plans under U.S. Secretary of Labor Elaine Chao and was chair of the Council’s Working Group on Communications to Retirement Plan Participants. She is a frequent speaker and writer on employee benefits and executive compensation topics.