An Unparalleled Mix of Executive Compensation, Employee Benefits, and Payroll Tax Capabilities
We recognize that attracting and retaining a first class executive management team is essential to a company’s success. Executive compensation, a critical element in recruiting and keeping top talent, has become a highly charged area for employers. The federal government has responded to public criticism of compensation practices by enacting new laws and regulations to curb perceived excesses. In this climate of heightened scrutiny and increased financial pressure, it is essential to have advisors who are knowledgeable in the array of legal and tax issues surrounding establishing, reporting, and taxing executive pay.
Executive compensation is a vital part of Miller & Chevalier’s nationally recognized Employee Benefits practice. Our lawyers are ranked among the best in the field, bringing both a deep understanding of the issues and real-world solutions to employers’ business challenges. Our clients are among the world’s largest public and privately-owned companies. They are sophisticated and discerning employers who value working with a proven leader in employee benefits.
Miller & Chevalier’s unique mix of executive compensation, employee benefits, and payroll tax experience is a hallmark of our practice. Our leadership in payroll taxes and fringe benefits adds a valuable dimension to our executive compensation practice. We match this with the capabilities of our nationally recognized tax practice, giving us a multifaceted view of a company’s executive compensation issues. It is a powerful combination that distinguishes our practice and that offers a distinct advantage to our clients.
The Advantage of Government Know-How
Our Employee Benefits team features multiple former senior Internal Revenue Service (IRS) officials, including members who served as Special Assistant for Fringe Benefits in the Office of IRS Associate Chief Counsel, as IRS Deputy Chief Counsel (Operations) and as Majority Tax Counsel for the House Committee on Ways and Means. Our lawyers are recognized in government for their integrity, subject-matter knowledge, and policy acumen, a distinction that makes us particularly effective in representing our clients’ positions with regulatory and legislative bodies. With offices next door to the U.S. Department of the Treasury and down the street from the IRS and Capitol Hill, our “inside the beltway” team routinely helps our clients navigate federal bureaucracy and successfully resolve issues before they develop into costly legal problems.
Deep and Multifaceted Experience
Our Executive Compensation practice is comprehensive, and we address the full range of our clients’ planning and policy needs. We design arrangements that will achieve clients’ business objectives and will withstand the scrutiny of regulatory agencies. We represent clients before federal regulatory and legislative bodies and guide them in dealing with important developing issues. Should litigation be necessary, we are well-positioned to represent their interests effectively in court.
We work with employers on all issues arising from executive employment, incentive, severance, and change-in-control arrangements, as well as non-compete and confidentiality provisions. We also deal with payroll taxes, reporting, and other issues related to fringe benefits for executives. We routinely counsel clients in the treatment of executive compensation programs in mergers and acquisitions and post-merger integration.
Clients regularly seek our advice on such specific issues as applying Section 409A to a variety of agreements, including deferred compensation arrangements, change-in-control agreements, and equity compensation; reviewing split-dollar and other insured arrangements; designing and administering incentive plans to qualify as performance plans under Section 162(m); minimizing taxes under Sections 280G and 4999; and designing and drafting equity compensation arrangements.
We also collaborate with our payroll tax lawyers to help our clients handle the employment tax and reporting obligations relating to executive compensation. When cross-border issues arise, we work with our foreign tax lawyers to handle any expatriate/impatriate compensation issues. Few firms can offer this breadth or “one-stop” service.
Comprehensive Service to Employers’ Tax, Human Resources, and General Counsel Functions
Because executive compensation has many facets, responsibilities for this area may be shared by several departments within a company. Our Executive Compensation team has the broad knowledge and experience required to advise each of these departments on the discrete issues that concern them. This ability sets our practice apart and creates efficiencies for our clients. Here is a small sample of the issues that our Executive Compensation lawyers routinely address:
Representative services to Tax Departments:
- Assist with all aspects of compliance with tax laws and regulations, including Sections 409A, 162(m) 422, 423, 83, 404, 280G, and 3121(v);
- Represent clients’ interests before the IRS on specific tax issues;
- Obtain letter rulings, as well as solicit the informal views and positions of IRS and Treasury Department officials;
- Address the implications of U.S.-based companies’ expatriate executive programs and foreign-based companies’ compensation arrangements in the U.S.;
- Handle executive compensation-related tax accounting issues;
- Address payroll tax issues of executive compensation;
- Provide tax advice regarding uncertain tax positions for purposes of FIN 48; and
- Represent clients in tax audits, controversy, and litigation.
Representative services to Human Resources Departments:
- Advise on the design, drafting, and administration of equity compensation, including stock options, stock appreciation rights (SARs), restricted stock, and employee stock purchase plans (ESPPs);
- Design and draft deferred compensation arrangements, including salary and bonus deferral plans;
- Design and draft supplemental retirement plans and agreements;
- Design and draft employment and severance agreements;
- Design and draft change-in-control agreements; and
- Assist with employee communications on applicable executive compensation issues.
Representative services to General Counsel Offices:
- Design and draft shareholder disclosure materials, including those required by the SEC’s proxy disclosure rules;
- Assist in addressing compensation committee inquiries and shareholder advocacy issues;
- Advise on the treatment of executive compensation programs in mergers and acquisitions and in post-merger integration;
- Design and draft consulting, non-compete, and confidentiality provisions;
- Design and draft employment and severance agreements;
- Address corporate law issues that may arise from executive compensation arrangements; and
- Represent clients in controversy and litigation.
Achieving Favorable Administrative Solutions
Handling IRS audits is a significant aspect of our core practice. We have a long and successful record helping our clients plan for audits and manage the range of audit issues. We have obtained outstanding results for our clients at every stage of the IRS administrative process. Our clients routinely engage us to help them develop strategies for issues that have been raised during an audit, as well as to identify other areas of risk.
We advise our clients on a comprehensive range of issues, including responding to information document requests, complying with formal document requests, quashing summonses, controlling statutes of limitation, establishing document retention procedures, identifying and protecting privileged documents, and dealing with specific audit adjustments proposed by examining agents.
We also know when an IRS administrative program may not be the best option for meeting a client’s goals. In those situations, we are equally experienced addressing issues in other government venues, such as the Department of the Treasury or, where legislative solutions apply, Congress.
Formidable Litigation Resources
We know that for most clients litigation is an option of last resort, and we are committed to resolving issues short of litigation, at the earliest opportunity, and with the best possible results for our clients. When litigation is necessary, companies with multi-million dollar amounts in controversy choose Miller & Chevalier for our experience, our approach to litigation, and our record of achievement in court. They know that we are forceful advocates who will defend them vigorously and persuasively.
Our Focus on Clients’ Business Needs
Our lawyers are pragmatic business professionals who never lose sight of our clients’ business objectives. Clients appreciate our ability to work easily and flexibly within their staffing structures and to integrate seamlessly with their team of internal and external specialists. Our engagements are tailored to client needs. For some, we provide ongoing counsel on executive compensation matters; others involve us in discrete complex projects or highly technical issues.
Our clients have ready access to the senior members of their team. Moreover, the nature of Miller & Chevalier’s practice, with lawyers in one location in the nation’s capital, favors our clients and prevents duplication of resources.
We know that having early information can be crucially important to employers in planning and shaping their fringe benefits programs. Accordingly, we pay exceptional attention to keeping our clients well informed. We issue up-to-the-minute alerts and present timely teleconferences and workshops to brief clients on the latest regulatory developments and trends and their impact on employers. Often, we are able to alert our clients to developments well in advance of their formal publication or announcement.