Executive and equity compensation issues that arise in connection with mergers, acquisitions, dispositions, spin-offs and other corporate transactions can be very complex and may trigger tax, accounting, securities and ERISA issues. Our employee benefits lawyers are experienced in advising clients regarding the myriad of employee benefits and executive compensation issues that arise in business transactions. We often work closely with our corporate and transactional lawyers to handle the unique or routine aspects of these transactions for which the firm provides business and finance services. Given the multinational businesses of our larger clients, many of these transactions have presented significant international benefits and compensation issues.
The employee benefits practice often provides ongoing benefits and compensation advice for clients that it assists in transactions. The combination of both our ongoing and transactional experience provides the basis for evaluating transactional issues with an appreciation for their long-term impacts. In addition, because the Employee Benefits team has been active in representing clients with respect to benefits claims and benefits litigation, we bring special insight and advice to the sensitive human resources decisions that transactions sometimes present.
- Corporate Spin-Offs
To enhance business focus, a number of major publicly traded companies have recently divided their operations into separate publicly traded entities. These “spin-offs” raise significant benefits and compensation issues on a global basis, and we have successfully assisted companies in meeting these challenges in transactions up to the multibillion dollar level. We have comprehensively addressed the myriad of issues involved in the division of pension plans, 401(k) plans and health and welfare plans, including the concerns of governmental agencies. We have helped spin-off clients restructure executive incentive and deferral plans, while maintaining tax compliances and adjusting stock options in conformance with applicable tax and accounting rules.
- ESOPs and Corporate Transactions
In a number of business transactions, we have recently faced substantial problems created by sellers’ ESOPs. Our clients have typically been publicly traded companies acquiring privately held entities that have ESOPs holding a large portion of their equity. Many of these nonpublic ESOPs have substantial compliance problems (e.g., inadequate valuations, improper loan and suspense account administration, incorrect put-option procedures). We have coordinated with company management and with the seller to devise creative solutions and provide adequate protection to our client in the purchase agreement. Drawing on our significant transactional experience, we have been able to make the business transaction work, while adequately protecting our client’s interests.
- Executive Representation
In appropriate cases we represent executive teams within a company. While our compensation practice focuses on representing companies, we believe that representation of executives has enhanced our ability to assist our company clients, increasing our insight and providing credibility with executives.