Equity & Executive Compensation 

1. 01

   A founder is receiving restricted stock and needs to file an 83(b) election

2. 02

   You are hiring a senior executive who wants acceleration, bonuses and a large grant

3. 03

   Your last 409A valuation is more than a year old or a major event has happened since

4. 04

   You want to extend post-termination exercise windows and need to understand the tax effect

1. 1

   Structure review

   We review your plan, grant templates and any executive terms on the table.

2. 2

   Tax analysis

   We identify 409A, 83 and ISO issues and recommend changes.

3. 3

   Documents and filings

   We revise the documents and prepare elections or notices as needed.

• Avoided

  Missing the 30-day window to file an 83(b) election, which cannot be extended

• Avoided

  Severance or bonus terms that inadvertently create 409A deferred compensation problems

• Avoided

  Granting ISOs above the annual $100,000 vesting limit, so the excess becomes NSOs

• Avoided

  Change-in-control payments that run into golden parachute rules under Section 280G

When do I need to file an 83(b) election?

Within 30 days after the stock is transferred to you, usually the date of grant or early exercise. The deadline is strict. Filing lets you recognize income on the current value rather than as shares vest, which can matter a lot if the value rises.

What is a 409A valuation?

It is an appraisal of the fair market value of your common stock, used to set option exercise prices. Using an independent appraiser generally creates a presumption that the value is reasonable. It is commonly refreshed at least every 12 months or after a material event such as a financing.

Are RSUs a good idea for an early-stage startup?

Usually not at the earliest stages, because RSUs are typically taxed when they settle and private company employees may have no way to sell shares to pay that tax. Options or restricted stock are more common early on. Later-stage companies often move to RSUs with a liquidity condition.

What is Section 280G and does it affect startups?

Section 280G penalizes certain large change-in-control payments to executives and other disqualified individuals. Private companies can often avoid the penalty through a shareholder approval process before the deal closes. It is worth checking whenever executive packages include acceleration or bonuses tied to an acquisition.

• EmploymentEquity & Incentive DocumentsGrant paperwork that matches what you promised in the offer and what the cap table shows.View service
• Venture & CorporateEquity Plans & GrantsEquity incentive plan, option and RSA grants, and approvals done in order.View service
• TaxSection 1202 / QSBS PlanningSection 1202 planning so founders and investors can document and protect QSBS status.View service
• TaxRestructurings & ExitsTax structuring for reorganizations, recaps, M&A and liquidity events.View service

More in Tax: Formation & Choice of Entity, Tax for Financings.