Good News: California Reduces Its Income Tax Penalty for 409A Violations

October.17.2013

Orrick’s Compensation & Benefits team issued an alert regarding California’s decision to reduce its additional state income tax on deferred compensation arrangements that fail to comply with Internal Revenue Code Section 409A.

Authors

Christine McCarthy Partner, Compensation & Benefits, Technology Companies Group

Silicon Valley

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D:+1 650 614 7634
E: [email protected]

Practice:

Technology & Innovation Sector
Compensation & Benefits
Technology Companies Group
Executive Compensation
Mergers & Acquisitions

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Christine McCarthy Partner

Silicon Valley

Christine has extensive experience advising on all aspects of equity and executive compensation plans and arrangements for multinational private and public companies, including large Fortune 500 public companies. Such advice covers the design, administration, and implementation of such plans and arrangements, as well as compliance with applicable federal and state laws, including corporate, securities and tax laws, NASDAQ/NYSE rules, and accounting rules. In addition, Christine counsels clients on corporate governance related issues that arise with respect to such plans and arrangements and regularly prepares disclosure required to be included in annual proxy statements, Form 10-K reports and Form 8-K filings.

Christine:

regularly advises compensation committees, Boards of Directors, companies, management and executives on employment agreements, severance agreements, equity compensation plans and agreements and similar arrangements;
has extensive experience advising late stage private companies on the specific compensation-related challenges facing these companies and, in particular, is known for her thought-leadership in designing and creating private company restricted stock unit programs and extended stock option exercise programs;
advises late stage private companies on the issues that arise during the preparation, lead-up to and implementation of their initial public offering, including issues related to executive and equity compensation, as well as, corporate governance and disclosure related matters; and
advises clients on merger and acquisition transactions, including issues related to executive and equity compensation, post-closing integration, Internal Revenue Code Section 409A (deferred compensation) and Internal Revenue Code Section 280G (the golden parachute rules).

Before joining the firm, Christine practiced at Cooley Godward Kronish LLP, Gray Cary Ware & Freidenrich LLP, and McDermott Will & Emery LLP.

Christine speaks and publishes articles regularly on executive and equity compensation related topics.

Juliano Banuelos Partner, Compensation & Benefits, Employment Law & Litigation

San Francisco

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D:+1 415 773 5961
E: [email protected]

Practice:

Technology & Innovation Sector
Compensation & Benefits
Employment Law & Litigation
Compensation & Benefits M&A
Latin America

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Juliano Banuelos Partner

San Francisco

Mr. Banuelos’ representative clients include Ancestry.com, Gap, Juniper Networks, Keysight Technologies, Oracle Corporation, Synopsys, Varex Imaging Corporation and Williams-Sonoma. Juliano is also a leader in providing compensation advice in mergers and acquisitions and regularly serves as special M&A tax counsel to in-house tax and HR departments.

In addition to being a recognized practitioner on IRC Section 409A, Juliano provides advice on the full range of compensation and benefits issues that arise ranging from designing and implementing equity-based, employment, separation, deferred compensation, change in control and similar arrangements to providing advice with respect to the design and legal compliance of qualified retirement plans, nonqualified deferred compensation plans and welfare plans.

Mr. Banuelos also advises companies on all aspects of the securities laws relating to such arrangements.

Clients interviewed for Chambers and Partners describe Mr. Banuelos as "incredibly bright and very creative," and "extremely knowledgeable, and extremely helpful, as he provides practical solutions."