• Using Profits Interest to Compensate Key Employees
  • December 2, 2011 | Author: Michael J. Changaris
  • Law Firm: Procopio, Cory, Hargreaves & Savitch LLP - Carlsbad Office
  • We are often asked by clients operating as partnerships or limited liability companies how to provide incentive compensation to key employees. They want to set up plans that (1) give them a stake in the business, (2) do not require them to make a capital investment, (3) result in no taxation to employee on receipt of such interest, and (4) when profits related to that stake are paid, are taxed at lower capital gains rates.