The purpose of a 409A valuation is to determine the value of the shares that your privately held company can offer to your employees in the form of stock options on a tax-free basis. It’s imperative to be diligent in…
As with most new rules and laws, 409A plans were established in response to a significant public scandal—the Enron scandal. As talk of bankruptcy was looming, many Enron executives arranged to accelerate the payments under the company’s deferred compensation plan…
Every new venture starts with a dream. If you are a budding entrepreneur whose dream it is to start an innovative company, the road to making that dream a reality is loaded with twists and turns. Like signposts on a…
Want to learn how to avoid 409A penalties? Good, you're in the right place! Nothing jeopardizes the stability of your growing company like having the IRS down your throat. But if your company doesn’t comply with Section 409A of the…
You’ve just recruited the first executive for your startup: a hotshot CIO. Naturally, you couldn’t offer her a big salary, but she’ll be the first recruit to receive company stock options. You had been thinking about using stock options and…
If you’re already familiar with IRC 409A, you probably know that safe harbor 409A valuations are important. But do you know how important they are? Let’s find out. We’ll dive into the details of what a safe harbor 409A valuation…
Here’s the deal. 409A valuations will wreck your employees’ lives and run your business into the ground, in that order, if you do not do them right. We’ll get into why that is—and why you can’t afford to roll the…
Section 409A of the Internal Revenue Code regulates non-qualified deferred compensation agreements between a corporation (a “service recipient”) and its employees, contractors, board members, etc. (“service providers”). In this article, we’ll take a closer look at IRC 409, it’s history,…