Double Vesting Restricted Stock Units
Businesses that award shares, options or other securities to UK employees, directors or officer holders need to be aware of the July 6 deadline to submit an Employment Related Securities (ERS) annual return to HM Revenue &...more
In startups and early-stage companies, founders often receive restricted equity grants as compensation for their services. With some planning, founders can potentially lower the taxes they pay on the appreciation of the...more
If a private equity buyer is exploring an acquisition of the company you manage, and you anticipate remaining involved in the business after the sale, there are a number of options that may be appealing to you. It is likely...more
Despite recent decisions by the Delaware Court of Chancery, many key corporate documents continue to include restrictions on indirect transfers of equity that may not be enforced if challenged in court....more
In 2021, LKQ Corporation (LKQ) filed suit against Robert Rutledge, its former plant manager, in the U.S. District Court for the Northern District of Illinois. LKQ alleged that Rutledge’s working for a competitor within nine...more
Lock-up agreements prohibit company insiders (founders, directors, executive officers and major stockholders) and other pre-IPO stockholders from selling their shares for a period of time after an offering. Lock-ups are...more
Earlier this month, the IRS released Form 15620, a new standardized form for taxpayers seeking to make elections under Internal Revenue Code (“Code”) section 83(b). Previously, to make this election, taxpayers needed to...more
As explained in a prior blog post, an employee who timely files a Section 83(b) election will be taxed on the fair market value of property transferred (typically restricted stock) to him or her in exchange for services on...more
This article is the sixth in our series on equity-based compensation intended to assist employers with answering a common question: What type of equity compensation award is best for our company and our employees?...more
This is the third edition of the Eversheds Sutherland SALT Scoreboard for 2024. Since 2016, we have tallied the results of what we deem to be significant taxpayer wins and losses and analyzed those results. Our entire SALT...more
On November 7, 2024, the IRS introduced Form 15620, a new standardized form for taxpayers opting to make a Section 83(b) election. Previously, taxpayers needed to send a letter to the IRS with the required information to make...more
The Ontario Capital Markets Tribunal (Tribunal) recently dismissed enforcement proceedings brought against several respondents by the Ontario Securities Commission (Commission) in Cormark Securities Inc (Re). The Commission...more
This article is the fourth in our series on equity-based compensation intended to assist employers with answering a common question: What type of equity compensation award is best for our company and our employees?...more
As far back as I can remember, the end of August has always elicited a sense of dread comparable to what many schoolchildren, and a fair number of adults, experience every Sunday afternoon. In retrospect, I cannot say that...more
The U.S. Treasury finalized regulations (the “Regulations”), providing rules for public companies subject to the 1% excise tax on certain redemptions of their publicly traded stock (the “Stock Repurchase Excise Tax”). The...more
The Federal Trade Commission’s (FTC) ban on noncompetition covenants (“noncompetes”) could significantly impact the design and administration of employee benefits and executive compensation arrangements....more
A common topic of negotiation in M&A transactions is how to treat performance-vesting equity awards for which the relevant performance period is not yet completed as of the closing of the deal. The target company may have...more
Employers who compensate employees through nonqualified stock options or restricted stock units (“RSUs”) should be aware of an upcoming Securities and Exchange Commission (“SEC”) rule change affecting the settlement of...more
Our startup clients are sometimes asked by investors or government agencies to provide their number of authorized and issued shares—the difference between the two isn’t always obvious but is critical to understand....more
When it comes to estate planning, addressing all your assets should be a priority. However, certain assets require greater attention than others. For example, if your assets include unregistered securities, such as restricted...more
For an employee who is a U.S. taxpayer, both the employer and the employee are liable for a portion of Social Security taxes and Medicare taxes (collectively referred to as “FICA” taxes) on the employee’s compensation. ...more
Restricted stock units (RSUs) and other forms of equity-based compensation are creating a stir in the workers’ compensation marketplace, forcing insurance carriers to revisit whether to include them as payroll when...more
A board of directors of a Delaware company may delegate its authority to grant equity awards if certain requirements enumerated in the Delaware General Corporation Law (DGCL) are met. Effective August 1, 2023, updates were...more
With the rise in inflation and downturn in economies, spin-offs have become an increasingly popular method of unlocking shareholder value in a down market. Often, the ability to obtain tax-free treatment in the U.S. for the...more
A potentially overlooked but important issue that public companies should have in mind when granting option or option-like awards is avoiding the unintentional appearance of “spring-loading” and “bullet-dodging,” both of...more