Structuring Profits Interests as Incentive Compensation for Key Employees and Service Providers
Distribution Threshold, Vesting, Company Repurchase Rights, 83(b) Election, Rights of the Profits Interest Holder
Recording of a 90-minute CLE video webinar with Q&A
This CLE course will guide attorneys and advisers on critical legal and tax considerations for granting profits interests to key employees and service providers. The panel will discuss critical issues regarding participation thresholds, vesting, repurchase rights, Section 83(b) election, rights of profits interest holders, financial reporting requirements, and other vital items essential to structuring an effective profits interest program.
Outline
- Profits interest vs. capital interest
- Options to acquire profits interests
- Phantom arrangements
- Income tax consequences, advantages, and disadvantages
- Design, structuring, and implementation considerations
Benefits
The panel will review these and other key issues:
- How does a capital interest differ from a profit interest, and what tax ramifications result from the type of equity interest granted?
- How does Section 409A apply?
- How does the Section 83(b) election apply?
- What issues arise for repurchase rights, vesting, and rights of the profits interest holder?
- How to establish safe harbor thresholds
- Financial reporting and valuation
Faculty
Joseph E. Hunt, IV
Member
Morse
Mr. Hunt is a corporate and tax transactional attorney with over 13 years of experience advising startup, emerging... | Read More
Mr. Hunt is a corporate and tax transactional attorney with over 13 years of experience advising startup, emerging growth, and middle-market companies across the full business lifecycle. He provides strategic counsel on entity formation, tax structuring, equity issuance, venture capital financing, and mergers and acquisitions. Mr. Hunt works with clients across a wide range of industries, with a particular focus on technology and life sciences startups. In addition to his legal practice, he serves as an adjunct professor at Boston University School of Law, where he teaches two courses in the Graduate Tax Program.
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