Executive compensation and employee benefits are diverse and rapidly changing areas of the law, and their significance to affairs of business continues to increase. At Akin Gump Strauss Hauer & Feld LLP, we represent a variety of clients, including investment funds, business entities, financial institutions, individual executives and individual and corporate trustees of employee benefit plans, on a full range of executive compensation and employee benefits issues. Our team is not only on top of the latest developments in the law, we also bring proven judgment and perspective to each case.
Executive Compensation Arrangements
We negotiate executive officer agreements on behalf of our corporate clients and individual executives. Our practice includes drafting and negotiating a wide variety of agreements, including employment, consulting and severance agreements. We work closely with our clients’ compensation consultants to implement plans that accord with market norms and provide the maximum retentive effect for our clients’ officers.
Non-Qualified Deferred Compensation Agreements
We work with our clients in establishing non-qualified deferred compensation arrangements to enable them to provide more retirement security to their officers. We also advise our clients on related deferred compensation arrangements such as supplemental executive retirement plans (SERP) and excess benefit plans. In addition, we have extensive experience with respect to issues raised by Section 409A of the Internal Revenue Code and non-qualified deferred compensation arrangements maintained by investment managers with offshore funds.
Executive incentive programs range from annual bonus plans to both cash-based and equity-based long-term incentive plans, including qualified and nonqualified stock options, stock appreciation rights, phantom stock, restricted stock and partnership profits interests. For our publicly traded clients, we use our practical experience and knowledge to design incentive plans to comply with Code Section 162(m) as well as to ensure that appropriate securities law disclosure of executive compensation arrangements is made in a timely fashion. We specialize in designing customized incentive programs covering either senior officers or a client’s larger employee population.
Golden Parachutes and Similar Arrangements
We provide comprehensive guidance relating to golden parachute arrangements’ condition payment or property transfers to certain key individuals on a change of ownership or control of the employer or a transfer of a significant portion of its assets. This is one example of certain arrangements that can be used to motivate employees to work toward the common goal of completing a transaction. At Akin Gump, we have substantial experience in designing these arrangements with a view toward their treatment under Code Sections 280G and 4999, as well as Code Section 409A knowledge to avoid any additional excise taxes under that section of the Code.
Mergers and Other Corporate Transactions
At Akin Gump, we have extensive counseling experience in dealing with the employee benefits and executive compensation issues that arise in stock and asset transactions, corporate restructurings, initial public offerings and spin-offs. Since a transaction can implicate so many facets of this area of law, we work as a team to coordinate a multidisciplinary approach that offers our clients superior service.
Qualified Retirement Plans
We design, amend and restate pension, profit sharing, 401(k) and other qualified retirement plans. These qualify for certain tax benefits under the Code, including deferral of taxation on contributions made on behalf of participants, immediate deductibility for the employer with regard to such contributions and deferral of earnings on such contributions.
Fiduciary Responsibility and Plan Investments
Our practice is heavily focused on Employee Retirement Income Security Act (ERISA) “plan asset” issues that arise for our investment funds clients, including issues relating to qualified professional asset managers (QPAM), venture capital operating companies (VCOC) and real estate operating companies (REOC). In this regard, we assist major fund investors on all matters relating to pension plan investing.
Welfare Benefit Plans
Our clients are increasingly concerned with providing adequate health, life, accident and disability coverage to their employees at the least possible cost. This area has been the focus of much legislative debate in recent years. The firm also has experience in the areas of welfare benefits, including the increasingly important area of retiree medical liability.
An employee stock ownership plan (ESOP) is a qualified plan designed to invest primarily in qualifying employer securities. The leveraged ESOP may serve as a financing tool for the employer and may be used to purchase stock from the corporation or from an existing stockholder. In addition, some employers use ESOPs as an anti-takeover device. The firm has experience in the design, documentation, administration and compliance aspects of ESOPs and related financing and acquisition transactions. We have advised on prohibited transaction exemption and fiduciary requirements of ESOP transactions. We have also assisted clients in the compliance requirements applicable to ESOPs owned in whole or in part by S corporations, including synthetic equity design and administration and repurchase liability and related distribution planning.