Equity Award Deferral Plans

Restricted Stock, Restricted Stock Units (RSU), Stock Appreciation Rights (SAR’s), and other forms of equity are taxed upon vesting. For this reason, many companies arrange their NQDC plans to allow for the deferral of equity awards. The deferral of these awards makes good sense as it encourages executives to hold their equity longer, thus further aligning shareholder and management interests. There are various issues to consider with these plans and The Todd Organization is adept in counseling companies in this area.