Employee Benefits and Executive Compensation

LEADERSHIP: David M. Kaplan

Pepper Hamilton LLP maintains a sophisticated, national practice advising employers, boards of directors and investors regarding the design, drafting, implementation, communication and operation of employee benefit plans and executive compensation arrangements. 

Employee Benefits 

In the Employee Benefits area, we counsel employers regarding all types of welfare benefit and retirement plans (including ESOPs). We also represent plan sponsors and fiduciaries in investigations and audits by government regulatory agencies, including the Internal Revenue Service (IRS), the U.S. Department of Labor, the Pension Benefit Guaranty Corporation and state agencies. In addition, we work closely with our ERISA litigation group to defend employers and fiduciaries in a wide range of individual and class action claims. We are currently devoting significant attention to the following types of matters: 

  • advising employers regarding tax, fiduciary and securities law issues implicated by the contribution of employer stock to qualified retirement plans
  • advising buyers and sellers regarding the employee benefits aspects of corporate transactions (including the post-transaction integration of acquired employee populations and the merger or termination of legacy plans)
  • identifying qualified plan defects and correcting those defects through IRS voluntary compliance mechanisms
  • amending defined contribution plans to incorporate automatic enrollment and default investment features, and otherwise helping plan sponsors improve plan participation, encourage better participant behavior or ensure favorable testing results
  • negotiating service agreements with plan trustees, third party administrators and other vendors.

Executive Compensation 

In the Executive Compensation area, we counsel regarding executive employment, change in control, retention and separation arrangements, equity-based compensation programs, annual and long term incentive plans, supplemental executive retirement programs and excess benefit and deferred compensation plans. 

We advise publicly traded companies regarding fiduciary and governance concerns, reporting and disclosure requirements, and tax compliance and planning matters. For example, we currently are devoting significant attention to the following types of matters: 

  • advising boards and compensation committees regarding required and best practices regarding the design and grant of equity-based incentives and severance rights
  • advising boards and compensation committees in the development of executive stock ownership guidelines
  • drafting compensation disclosures in compliance with recently revised SEC proxy rules
  • amending plans and agreements to conform to final regulations under Section 409A
  • analyzing existing severance and change in control commitments to model potential liabilities and tax consequences under Section 280G
  • designing incentive arrangements that maximize the tax deductibility of compensation under Section 162(m)
  • negotiating executive arrivals and departures and drafting related agreements and Form 8-K disclosures.

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