Jenner & Block

"Stock Option Strike Prices Under Section 409A," Compliance Week

In this article, Jenner & Block Partner S. Tony Ling answers a question regarding the permissibility of using an averaging period to establish the strike price for an award of stock options under Section 409A under the Internal Revenue Code.  Mr. Ling explains the intent and complex nature of the recently-enacted tax code provision, and advises that a company may use an averaging period if the commitment to make the stock option award is irrevocably made prior to the start of the averaging period.