Last Thursday, on September 3, 2020, CEOWorld magazine published an article I wrote on “Achieving Zero Taxation on Sale of Your Startup Equity”. This new article is designed for CEOs, C-level and senior executives, who are considering taking a position in a startup or early stage company in life sciences, tech, e-commerce or another high growth area of the economy, where executive equity may comprise a major part of your compensation package. My article discusses how taking equity in qualified small business stock may enable you to have zero Federal taxation on all or most of your appreciation on a sale of shares after 5 years. That exclusion from tax applies to not only the Federal capital gains tax but also the net investment income tax and the alternative minimum tax (AMT), on appreciation up to $10 million or 10x your adjusted tax basis in the stock, whichever is greater. The article also includes a number of important tips to qualify your shares for this tax exclusion on sale, including the following:
To see my full CEOWorld magazine. article, go to LINK: https://ceoworld.biz/2020/09/03/achieving-zero-taxation-on-sale-of-your-startup-equity/ Or https://www.executiveemploymentattorney.com/achieving-zero-taxation-on-sale-of-your-startup-equity/ This was my 29th article published in CEOWORLD. Previously, the editor advised that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website and add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field. For a library of my past article published by CEOWORLD, see https://ceoworld.biz/author/robert-adelson/
With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs,CTOs, COOs, CIOs, CTO/CSOs, senior management executives, business leaders, and high net worth individuals worldwide. It is my hope that this article on eliminating taxation on all or most of the appreciation on early stage or high growth stock a CEO or other C-level or senior executive receives as part of your executive compensation package may be of benefit to those currently or in the future negotiating their executive compensation and equity package, or renegotiating in a retention situation. If you or any colleague of yours has a need in this area, please do reach out to me at [email protected].
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Restricted stock can be offered in lieu of cash to deliver immediate value with a strike price2/25/2020 Restricted stock can be offered in lieu of cash to deliver immediate value with a strike price much less than current fair market value. For senior recruits, technical or executive, you want to offer more to beat the competition – restricted stock does this. Robert Adelson, an executive compensation attorney, negotiates executive compensation; in one representative case, he worked with executive Steve Miles* to set up a vesting schedule to later grant him compensation in the form of stock. By using its stock, the company avoided cash cost, and stock offers key advantages that make equity more valuable to employees than cash. Some of these benefits are:
In addition, restricted stockholders usually provide voting rights. As a result of the benefits of restricted stock, the use of this form of employee compensation has become very popular. Since the issue of founders' shares is deductible, the company can save money that would have gone to taxes by using stock for pay. The tax windfall can also be used creatively to enhance efforts to recruit or retain key people. This is done by sharing the company's tax windfall with employees. As an executive employment attorney, Robert Adelson works with C-level executives everyday and sees that when growth is the priority, cash savings are important, and building the team is critical – stock options provide lucrative advantages for both the company and the executive. When working with executive Steve Miles, Robert Adelson negotiated his employment compensation and set up a several year vesting plan with attainable restrictions. This allowed the company to avoid cash cost and gave Mr. Miles compensation to work and look forward to down the road. Attorney Adelson also worked with the Company to grant Mr. Miles voting rights, like any other shareholder would have. A main advantage with restricted stocks is that they differ from other stock options and still retain some value if the price were to go down. Attorney Robert Adelson frequently represents employees and executives negotiating their executive contract terms, stock, options, relocation, non-competes, termination and separation agreements. He also represents startup and smaller companies in software, medical device and other technology-based fields, independent consultants with compensation and stockholder arrangements, incorporation and liability protection, intellectual property protection, and in vendor, client and subcontractor contracting arrangements. Executive Steve Miles was a key employee and through the negotiation of his executive employment agreement; Attorney Adelson was able to grant him a lucrative and flexible form of executive compensation. *All dates, client’s names and companies have been altered to keep confidentiality. A week ago, on October 30, 2019, CEOWorld magazine published an article I wrote on “Executive Equity Compensation in Severance Negotiations”. The magazine advised me that I can use “Featured in the CEOWOLRD magazine” and the CEOWORLD “Logo” on my website. This was my 25th article published in CEOWORLD. Earlier this year, the editor advised that I can add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field.
See https://ceoworld.biz/author/robert-adelson/ This article, my most recent, published October 30, is designed for CEOs, C-level and senior executives, for whom equity can often be the most valuable part of their executive compensation package. The article addresses the question – what happens to that equity position if you face employment termination – and offers tips for severance negotiations over equity, including
https://ceoworld.biz/2019/10/30/executive-equity-compensation-in-severance-negotiations/ Or on my website at https://www.executiveemploymentattorney.com/executive-equity-compensation-in-severance-negotiations/ With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide. https://www.linkedin.com/company/ceomagazine/ The editor has also advised that I can add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field. See https://ceoworld.biz/author/robert-adelson/ It is my hope that this article will be helpful to CEOs, COOs, CMOs, other C-Level and senior executives to provide for appropriate terms to protect their equity rights in any present or future severance negotiations. If you or any colleague of yours has a need in this area, please do reach out to me at [email protected]. On October 1, 2019, CEOWorld magazine published an article I wrote on “Executive Compensation in a Pre-IPO Company.” The magazine advised me that I can use “Featured in the CEOWORLD magazine” and the CEOWORLD “Logo” on my website. This was my 24th article published in CEOWORLD. Earlier this year, the editor advised that I can add CEOWORLD magazine in my LinkedIn profile’s “Experience Section” as an “Opinion Columnist.” and authority in the field. This article, my most recent, published October 1, is designed for C-level and senior executives in private companies that are planning for or soon contemplate an initial public offering. The article discusses executive compensation in public companies, then executive compensation in private companies and the transition from a private company to a public company. The article offers further tips to the executive facing and negotiating that transition including
To see my full CEOWorld magazine. article, go to LINK: https://ceoworld.biz/2019/10/01/executive-compensation-in-a-pre-ipo-company/ Or on my website at https://www.executiveemploymentattorney.com/executive-compensation-in-a-pre-ipo-company/ With more than 12.4+ million-page views, CEOWORLD magazine is the world’s leading business magazine written strictly for CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide.
It is my hope that this article will be helpful to CEOs, COOs, CMOs, other C-Level and senior executives in pre-IPO companies may benefit from this article. If you or any colleague of yours has a need in this area, please do reach out to me at [email protected]. Executive employment agreements and equity arrangements are the “golden keys” that unlock “golden handcuffs”. Signing bonuses serve as the key to open the door to hiring. Vesting options, bonuses and other “golden handcuff” benefits make executives more reluctant to leave their current position for a new one. However, signing bonuses are often used as a tool of persuasion – urging an executive to sign with a new company. Signing bonuses are crucial when accompanying a job offer that has a lower salary than an executive wants. CEO, Maria Leone* sought out the counsel of Attorney Robert Adelson who helped her negotiate an increased signing bonus with a new firm that expressed interest in hiring her. Maria Leone was currently working as a CEO at a NY ad agency where she made a comfortable salary with foreseeable bonuses and vesting options, however when a young, rising agency (we will call Marketing X*) expressed interest with a higher salary Maria grew interested. Since the Marketing X was still young, and the salary the company was offering was not substantially higher Maria wanted to explore her options and negotiate her executive contract terms. Attorney Adelson negotiated the executive’s employment agreement as well as her equity arrangements, convincing Marketing X to set up a package with stock and options to reward Maria’s loyalty later down the road. Attorney Adelson also negotiated a substantial increase in the signing bonus and an increased salary as well. The signing bonuses and equity arrangements that Marketing X arranged from Maria Leone helped make her particular transition between companies smooth and lucrative, making Maria whole for what she lost when leaving her current position.
Robert Adelson was successful with this representative case because he applied his over 30 years experience, care and time to help Maria Leone achieve a more desirable position. As a Boston executive employment attorney, with clients across the country, Attorney Adelson has helped many executives negotiate signing bonuses and employment agreements. This representative case highlights the success that Attorney Adelson’s executive compensation negotiations led to for CEO Maria Leone. *All dates, client’s names and companies have been altered to keep confidentiality. |
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