Executive compensation plans are helpful in attracting and retaining talented employees. This course is designed to provide an explanation of these plans and to simplify some of the complex requirements for establishing and maintaining such plans. This program provides an overview and understanding of the various methods of compensating employees on a tax-free or tax-deferred basis. The materials describe each method, each type of plan, and the legal requirements for compensation. The deferred compensation plans discussed are all nonqualified deferral arrangements. Many of the provisions in the Employee Retirement Income Security Act of 1974 (ERISA) are also covered.

Use of Materials

Audio or DVD
The user should begin by watching the DVD segment or listening to the audio CD for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. It may be helpful to highlight important material and/or to make additional notes. Next, the user should complete the study questions at the end of the chapter and review the answers. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished watching the DVD or listening to the audio CDs and reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text or DVD or audio CDs that were difficult. When the user is ready, s/he should complete the quizzer. Reviewing notes periodically will increase retention of the material.

Online
The user should begin by watching the streamed video segment, if any, or listening to the streamed audio segment, if any, for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. After the user has studied each chapter, s/he should click on the link at the left to complete the interactive study questions. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished watching the streamed video, if any, or listening to the streamed audio, if any, and reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text or video/audio, if any, that were difficult. When the user is ready, s/he should click on the link to the left to complete the quizzer. The user's CPE certificate will be provided immediately upon successful completion of the quizzer.

Software
The user should begin by reviewing the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. As the user studies each chapter, s/he should complete the interactive study questions that appear in the lower panel of the screen. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text that were difficult. When the user is ready, s/he should click on the link at the far left to complete the quizzer. The user should email her/his quizzer statistics using the quizzer submission link in the software and the user's CPE certificate will be mailed to her/him.

Chapter 1 explains the general taxation principles of nonqualified deferral arrangements, including the economic benefit and constructive receipt doctrines, funding, nonqualified trusts, and the employer's deduction.

Chapter 2 explores nonqualified deferred compensation, including rabbi trusts, secular trusts, excess benefit plans, and supplemental executive retirement plans.

Chapter 3 provides information on IRC §83, which dictates the timing and amount of income and deductions to be recognized.

Chapter 4 addresses nonstatutory stock options and the requirements for incentive stock options.

Chapter 5 examines how the value of stock appreciation rights is determined.

Chapter 6 provides a brief description of phantom stock plans.

Chapter 7 takes a look at how performance units and performance shares awards are determined.

Chapter 8 provides a summary of performance cash plans.

Chapter 9 addresses the deductibility of golden parachute payments.

Chapter 10 examines the Employee Retirement Income Security Act of 1974.

Chapter 11 provides information on when distributions are treated as wages for federal income tax, FICA and FUTA purposes.

Throughout this program, the user will find explanations and discussions regarding some of the issues that often face practitioners. In order to enhance the user's comprehension of the material and highlight important practical considerations, this publication includes the following designation:

A Biskpoint presents analysis or commentary that attempts to explain or clarify statutory or regulatory authority or decisions by the judiciary

• Describe funded and unfunded nonqualified plan arrangements

• Explain the consequences to an employee beneficiary when an employer establishes a nonqualified trust under IRC §§401(a) and 501(a)

• Describe the general rules surrounding an employer's deduction of current and deferred compensation

• Describe the advantages of a nonqualified deferred compensation plan

• Explain the impact of IRC §409A on nonqualified deferred compensation plans

• Explain the proper application of excess benefit plans

• Describe the benefits available in a supplemental executive retirement plan (SERP)

• Define the basic concepts and key elements related to the application of IRC §83

• Describe the scope of nonstatutory stock options and the reporting requirements for the recipient of such options

• Identify the requirements and income tax consequences of incentive stock option plans, stock appreciation rights, and phantom stock plans

• Discuss the typical features and tax consequences of performance cash plans

• Define excess parachute payment, golden parachute payment, and disqualified individual

• Explain the tax consequences of parachute payments

• Define the terms and phrases most frequently associated with ERISA

• Explain which employee benefit plans are either covered or exempt from the provisions of ERISA

• Describe the reporting and disclosure aspects of ERISA

• Discuss the responsibilities of a plan fiduciary

• Discuss the appropriate timing of federal income tax, FICA, and FUTA withholding

Mr. Smith represents public and private companies and governmental organizations, assisting them with benefit plan design, compliance and operational issues, and understanding and meeting fiduciary duties. He has crafted a number of "state of the art" types of qualified and nonqualified retirement plans, always endeavoring to meet the client's needs, save taxes, and provide an effective tool for client productivity and profitability. He prides himself on learning the nature of each client's business so that he can be a more effective counselor and advocate.

Since 1980, Mr. Smith has been a member of either the adjunct or visiting faculties of the University of Denver College of Law. He received his undergraduate degree (BA) from Washington University in St. Louis and both of his law degrees (JD and LLM (taxation)) from the University of Denver.

Mr. Smith has been one of the country's foremost CPE instructors for over 24 years. He has presented seminars and given speeches in most of the states to many diverse types of professional groups, including the AICPA, more than 30 different state societies of CPAs, the National Tax Institute, the University of Denver, the Western Pension & Benefits Conference, the American Society of Pension Professionals and Actuaries (ASPPA), the Minnesota Tax Conference, the Iowa Tax Institute, Accountants Education Services, IACEBS, the Golden Gate Chapter of the California Society of Enrolled Agents, the College for Financial Planning, banking and insurance organizations, and others. Many of Mr. Smith's seminars are available online and on DVD through Bisk Education, Inc. Mr. Smith has written numerous articles and course materials in his area of expertise.

Mr. Smith has served as president of the Denver Tax Group. He has been a member of the Western Pension and Benefits Conference since 1986 and has served as its president and as president of the Denver Chapter. Mr. Smith is currently senior vice president of ASPPA and is a member of its board of directors. Mr. Smith also serves as president of the Colorado Regional Cabinet of Washington University in St. Louis.

Mr. Smith has been selected to Chambers-America's Leading Lawyers, The Best Lawyers in America, Who's Who in American Law, and Who's Who in American Education. He is a member of the American Bar Association, the Colorado Bar Association, and the Denver Bar Association. Mr. Smith is admitted to practice before the Colorado Supreme Court, the United States District Court for the District of Colorado, the United States Tax Court, the Tenth Circuit U.S. Court of Appeals, and the Seventh Circuit U.S. Court of Appeals.

Mr. Smith, in preparing these materials, is not rendering legal or tax advice nor establishing an attorney-client relationship with any party. These materials and any related recordings are informational only. (Author/Speaker)

Irene Gallagher, JD, is also a partner in the Denver office of Holme, Roberts & Owen LLP. Practicing in the Compensation and Benefits Practice Group, Irene advises employers on all matters affecting tax-qualified retirement plans such as IRC §401(k) plans, ESOPs, and welfare benefit plans. She represents buyers and sellers in the employee benefits and executive compensation aspects of merger, acquisition, and reorganization transactions. (Speaker)