- Gift, Estate and Inheritance Taxes and Estate
- Litigation Support and Expert Witness Services
- Business Valuations for Corporate Finance Transactions
- Stock Options and Other Equity Based Compensation
- Portfolio Valuation for Investment Management Companies
- Financial Reporting for Mergers and Acquisitions
- Valuation of Intangible Assets
- Employee Stock Ownership Plans (ESOPs)
TAX COMPLIANCE FOR EQUITY COMPENSATION UNDER IRC 409A
Internal Revenue Code (IRC) Section 409A dictates new rules for private companies issuing equity-based, deferred compensation plans. These rules apply not only to stock option grants, but also to other forms of deferred compensation such as stock appreciation rights (SARs). Key to Section 409A is the requirement that companies issuing stock options pay tax penalties if the strike price of the option grant is below the fair market value of the company’s stock price.
Private companies either currently issuing stock options or considering creating a new equity compensation plan would benefit from seeking an external valuation to protect against unnecessary tax penalties. The Wharton team has expertise in the valuation of private companies and their equity compensation plans. We provide independent valuation in support of either new or existing compensation plans and can help you design a well thought out plan for your company.