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Structuring Compensation Arrangements for Nonprofit Executives: New Tax Bill Provisions, Section 4960, Excise Tax

A live 90-minute CLE/CPE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Tuesday, July 22, 2025

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, June 27, 2025

or call 1-800-926-7926
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This CLE/CPE course will provide employee benefits counsel with an overview of structuring equity compensation arrangements for executives of nonprofit organizations. The panel will discuss important tax considerations that are unique to non-profits, including intermediate sanctions, special tax rules for deferred compensation, the excise tax under Section 4960, and the potential impact of the new tax bill.

Description

Deferred compensation and other executive compensation plans and arrangements for tax-exempt organizations differ from those of for-profit entities. In particular, the requirements to maintain tax-exempt status and the “intermediate sanctions” excise tax regime under Section 4958 impose reasonableness requirements for total compensation, special timing rules under Section 457 limit the ability to defer compensation, and Section 4960 imposes an excise tax on compensation to certain employees in excess of $1 million, as well as on separation payments that equal or exceed three times an employee’s average pay over the preceding five years. ERISA counsel must understand complex tax rules, detailed reporting requirements, and available planning techniques when structuring executive compensation for tax-exempt organizations.

Listen as our panel discusses the special rules for tax-exempt entities and practical methods to recruit and retain talent while avoiding tax surprises.

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Outline

  1. Overview of key tax considerations for compensation to employees of tax-exempt organizations
  2. Entities and employees subject to Sections 457, 4958 and 4960
  3. Additional items to consider
    1. “Covered employees” and “disqualified persons”
    2. Aggregation rules
    3. Traps for deferred compensation and separation payments
    4. Reporting requirements
  4. Best practices in structuring executive comp for tax-exempt entities

Benefits

The panel will review these and other key issues:

  • Recognizing the differences in structuring executive comp arrangements for tax-exempt vs. taxable entities
  • Understanding the dynamics of maintaining tax-qualified status, avoiding intermediate sanctions, and mitigating the 21 percent excise tax under Section 4960
  • Determining what entities and employees are subject to the special tax rules
  • Aggregation rules and key tax planning considerations
  • Practical techniques for structuring executive comp for nonprofits
  • Potential impact of the new tax bill

Faculty

Safra, Seth
Seth J. Safra
Partner
Proskauer Rose

Mr. Safra advises clients on compensation and benefit programs. His experience covers a broad range of retirement plan...  |  Read More

Attend on July 22

Early Discount (through 06/27/25)

See NASBA details.

Cannot Attend July 22?

Early Discount (through 06/27/25)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. CPE credit is not available on recordings. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video