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In this Client Alert, Partner Matthew J. Renaud and Associates Galen R. Mason and Raymond D. Sinnappan discuss the actions that employers should take before December 31, 2007 and beyond with respect to Code Section 409A. Code Section 409A governs many forms of nonqualified deferred compensation — a significant portion of many executives’ compensation packages. The financial consequences for failure to comply with Code Section 409A can be severe for the executive and possibly the company.
Although IRS Notice 2007-86 gives employers until December 31, 2008, to accomplish much of their Internal Revenue Code Section 409A (“Section 409A”) compliance, there are still actions that may need to be taken by December 31, 2007. A summary of the 2008 transition relief is provided at the end of this Client Alert.