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This article is the second 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
To provide long-term incentives to top employees and align their interests with their employers, many businesses offer some kind of equity compensation. However, when a business is owned by a family, the decision to provide...more
The federal government has taken another step to further incentivize highly skilled workers to join the gig economy: it has proposed rules that would permit publicly held gig companies to offer equity compensation to their...more
The Economic Growth Regulatory Relief and Consumer Protection Act, which was signed into law by President Trump on May 24, 2018, directs the US Securities and Exchange Commission (SEC) to amend a significant provision of Rule...more
It has been close to a decade since the New York Stock Exchange (NYSE) last updated its set of frequently asked questions (FAQs) regarding equity compensation plans. On August 18, 2016, the NYSE released updated FAQs and,...more
Prior to a recent change, in order for a Section 83(b) election to be effective, the taxpayer had to: - File the Section 83(b) election within 30 days of the receipt of restricted property (typically, restricted stock)...more
One question I get asked all the time by a team founding a startup is how to allocate stock among the two or three initial founders. Often the question is expanded to cover other “founders” who are not prepared to join the...more
Even though you may have the urge to share the potential success with everyone that has helped you along the way and to tell them all about it, there is a right way to do this with both co-founders and non-founders to avoid...more
Equity grants can be an attractive alternative to cash when compensating employees, consultants, and service providers. Beware, though: if not structured properly, equity grants can cause some nasty consequences for the...more
The importance of time-based vesting for equity and/or rights to acquire equity granted to founders and subsequent employees of venture-backed companies should not be understated. Equally important is what events should cause...more
The IRS issued final regulations regarding the definition of “substantial risk of forfeiture” under Code Section 83. These regulations have a particular impact on the timing of taxation of employer transfers of stock and...more
In February 2014, the Securities and Exchange Commission’s (SEC) Division of Corporation Finance updated Section 9520 of its Financial Reporting Manual. Section 9520 is part of Topic 9, which provides guidance for...more
As the use of equity-based compensation continues to grow around the world, different jurisdictions are striving for the right balance in the regulatory frameworks governing equity-based compensation arrangements. This update...more
In this issue: - California Court of Appeal: No Man May Profit From His Own Wrongdoing in a Court of Justice - The (True) Object of My Affection: A Nontaxable Stock Screening Service - Alternate Universe...more