• Final Golden Parachute Regulations Address Shareholder Approval Conditions and Other Private Company Issues
  • September 4, 2003 | Author: Jonathan B. Dubitzky
  • Law Firm: Sullivan & Worcester LLP - Boston Office
  • The provisions of Sections 280G and 4999 of the Internal Revenue Code can impose harsh penalties on golden parachute payments made to employees in connection with a corporate change of control. "Excess parachute payments" are nondeductible by the corporate employer, and subject to a 20% nondeductible excise tax imposed on the recipient. For the first time since the golden parachute provisions were enacted in 1984, final regulations have been issued to interpret the provisions. The final regulations generally apply to payments made in connection with a change in ownership or control that occurs after 2003.