Venture capital financing activity in 2023 contracted for the second consecutive year in the face of rising interest rates, concerns regarding the trajectory of the economy and continued geopolitical tension.
VC-backed...more
Pessimism surrounding the Federal Reserve’s interest rate hikes, combined with subdued business and consumer confidence as well as geopolitical concerns, weighed heavily on the IPO market in 2023.
With 117 IPOs in 2023...more
Section 6039 of the Internal Revenue Code (Section 6039) requires corporations to file returns with the Internal Revenue Service (IRS) and provide information statements to employees reporting exercises of incentive stock...more
Compensation clawbacks can raise difficult, and often adverse, tax issues for employees and other service providers. Specifically, for clawbacks that are effected on a gross (pretax) basis, questions arise as to how the...more
11/29/2023
/ C-Suite Executives ,
Clawbacks ,
Equity Compensation ,
Executive Compensation ,
Incentive Compensation ,
Income Taxes ,
Listing Rules ,
Nasdaq ,
Rule 10D-1 ,
Securities Exchange Act ,
Tax Liability ,
Third-Party Service Provider
On October 17, 2023, the Internal Revenue Service (IRS) updated the electronic signature guidance in its Internal Revenue Manual (IRM) to reflect the electronic signature relief that the IRS provided to taxpayers during the...more
Equity compensation is perhaps the most critical element of any startup company’s compensation package, helping to bridge the gap between the cash compensation a startup can offer against the more significant cash...more
Stock options are typically a critical component of a private company’s ability to recruit, incentivize and retain key talent. Particularly for early-stage companies, rewarding equity packages can help make up for the gap...more
Stock options are often a significant, and critical, component of a public company’s compensation and benefits programs as they align the interests of employees and stockholders—when the company’s stock price increases,...more
Consider this fairly typical situation. Four years ago, employee Emma was granted an incentive stock option (ISO) to purchase 100,000 shares with an exercise price of $0.86 per share. Emma’s award is fully-vested and she...more
In this four-part series, we explore several of the most commonly-considered option program enhancements emerging companies may consider as they strive to make their stock option programs as compelling as possible to recruit...more
In the first part of this four-part series, we provided a high-level summary of stock option basics. In this second installment, we build on those basics and begin our exploration of stock option program “enhancements” by...more
This blog is the first post in a four-part series. Part I will provide a high-level summary of stock option basics....more
Across the board, despite the pall cast by the COVID-19 pandemic, 2020 was a year of strong IPO deal flow and aftermarket performance, punctuated by a breathtaking surge in IPOs by special purpose acquisition companies...more
The 2017 Tax Cuts and Jobs Act (TCJA) significantly amended Internal Revenue Code Section 162(m), which generally disallows the deduction of compensation in excess of $1 million paid by a “publicly held corporation” to a...more
12/18/2019
/ Acquisitions ,
Comment Period ,
Compensation & Benefits ,
Covered Employees ,
Executive Compensation ,
Grandfathering Rules ,
Internal Revenue Code (IRC) ,
IRS ,
Mergers ,
Proposed Regulation ,
Publicly-Traded Companies ,
Section 162(m) ,
Section 409A ,
Tax Cuts and Jobs Act ,
Vesting
From time to time, and primarily when the economy is booming, allowing stock options to be “early exercised” - that is, allowing options to be exercised before they are vested - becomes in vogue. We are in one of those times....more
5/24/2019
/ Alternative Minimum Tax ,
Capital Gains ,
Corporate Governance ,
Exercise of an Option ,
Holding Periods ,
Incentive Stock Options ,
Income Taxes ,
Qualified Small Business Stock ,
Stock Options ,
Tax Planning ,
Vesting
The venture capital market rebounded in 2017, with an uptick in deal flow, an increase in financing sizes, soaring proceeds and a record high median premoney valuation. The $73.2 billion invested into the US venture capital...more
The new Section 83(i) of the tax code, enacted as part of the Tax Act, allows certain private company employees to elect to defer, solely for income tax purposes and for a period of up to five years, the income attributable...more
Section 162(m) of the Code generally disallows the deduction of compensation in excess of $1 million paid by a public company to a “covered employee” in any single taxable year. The Tax Act makes the following changes to...more
Summary: The IRS recently informally revised its guidance regarding which officers of public companies must be considered when determining the compensation deduction limitation of Section 162(m) of the Internal Revenue Code...more