Practices

Compensation and Benefits

Why Cooley

Our clients — ranging from emerging growth companies to large public corporations, as well as CEOs, other members of senior management, boards of directors, individual directors and fiduciaries of employee benefit plans — view us as their problem solvers, not just dispensers of legal knowledge. Our approach is grounded in the importance of delivering our services with technical proficiency, a prompt and concise response, creativity, practical application and genuine concern.

We regularly work with employers on projects driven by special needs, including employee benefits issues raised by mergers and acquisitions, workforce reductions, equity incentive programs for employers with expanding foreign operations and shareholder relation issues related to say-on-pay proposals, for the full lifecycle of a company.

We are well versed in all aspects of executive compensation, including public disclosure under SEC rules; institutional shareholder and proxy advisory firm "hot buttons"; the design, drafting and implementation of a wide range of compensation plans; and the tax, securities law, labor and corporate governance aspects of compensation programs and policies. We have extensive experience in formulating and negotiating employment and severance arrangements for senior executives, including change in control agreements and indemnification agreements, and dealing with "golden parachute" issues.

We provide regular counsel regarding tax-qualified retirement programs subject to ERISA, as well as exempt programs such as top-hat plans and severance pay arrangements. Our lawyers have deep experience with ERISA's plan asset regulations on behalf of our venture capital, private equity and other investment fund clients. On the health & welfare plan side, we assist clients in the establishment of all varieties of such plans, and help them navigate the regulatory landscape, including compliance issues arising under the Affordable Care Act.

Areas of practice

Stock and stock-based compensation

  • Equity incentive plans and various equity awards under such plans (e.g., stock options, restricted stock, restricted stock units, performance awards), including state-of-the-art design alternatives to fit a company's stage of development 
  • Stock award restructuring and modification, "repricings" and other exchange programs 
  • Compliance with IRC §409A and §162(m)  
  • Institutional shareholder and proxy advisory policies
  • Compliance with Nasdaq and New York Stock Exchange listing requirements   
  • Employee stock purchase plans
  • Stock appreciation rights and phantom stock plans and other equity arrangements for limited liability companies
  • Global stock plans with the ability to give strategic advice on the tax, securities laws and labor issues in over 60 jurisdictions

Executive compensation

  • Executive employment and severance agreements 
  • Executive compensation-related securities filing disclosures (including CD&A, compensation tables and other proxy disclosure), with special expertise in institutional shareholder and proxy advisor concerns and policies
  • Long- and short-term incentive plans 
  • Severance benefit plans and employment agreements (including IRC §409A analysis)
  • Change in control plans and agreements
  • Bonus plans (including IRC §409A and §162(m)
  • “Golden parachute” planning and excise tax analysis
  • Deferred compensation plans 
  • Supplemental executive retirement plans

Mergers and Acquisitions

  • Extensive experience on both the "buy-side" and sell-side" for private and public companies, including in the context of private equity transactions
  • Due diligence related to target company equity compensation plans, severance benefit and change in control plans, retention bonus plans, 401(k) and pension plans, welfare plans and other compensation and benefit arrangements
  • Negotiation and structuring of compensation and benefits aspects of both transaction agreement and associated documents, including new employment agreements, equity arrangements and retention plans
  • Preparation of Section 280G "golden parachute" calculations and related shareholder vote materials
  • Assistance with post-transaction compensation related matters and benefits integration
  • Particular experience with international incentives in the context of cross-border transactions

Retirement benefits

  • Defined contribution plans (401(k), profit sharing, ESOP and money purchase) 
  • Defined benefit plans (final average pay, career average pay, cash balance) 
  • Retirement plan committee charters and governance counseling
  • Retirement incentives (window benefits) 
  • DOL exemptions letters and IRS private letter rulings
  • Spinoffs, mergers and plan terminations 
  • Voluntary correction programs
  • Nonqualified deferred compensation plans

ERISA plan assets

  • ERISA fiduciary duty analysis, compliance and training
  • Investment management and consulting agreements 
  • Structuring of investment vehicles for ERISA plan assets 
  • Prohibited transaction analysis and exemptions

Health and other welfare benefits

  • Health, life and disability insurance benefits 
  • Severance pay plans 
  • COBRA, Cal-COBRA and other state law equivalents 
  • Flexible benefit (cafeteria) plans (premium conversion, dependent care, medical expense reimbursement) 
  • Self-funded arrangements and stop-loss coverage 
  • HIPAA privacy procedures and portability matters
  • Other health and welfare benefit plans (e.g., medical, dental, vision, qualified transportation and other fringe benefit plans)