This CLE program will explore phantom equity and synthetic equity arrangements as alternative methods of structuring incentive compensation for employees, executives, and management in corporations and limited liability companies. Participants will examine the differences between phantom equity, profits interests, and stock appreciation rights, including key considerations for C-corporations and LLCs.

The program will address federal tax implications, Internal Revenue Code Section 409A compliance, valuation methods, vesting schedules, and payment triggers. Attendees will also learn practical drafting and negotiation considerations, including forfeiture provisions, change-of-control payments, restrictive covenants, and common compliance pitfalls when structuring and documenting synthetic equity arrangements.