Structuring Executive Compensation for Tax-Exempt Organizations: High Stakes, High Scrutiny, and How to Avoid IRS Penalties

Seth J. Safra | Proskauer Rose LLP

Seth J. Safra leads Proskauer’s Employee Benefits & Executive Compensation Group. Described by clients as “extremely knowledgeable, practical, and strategic,” Seth advises clients on compensation and benefit programs.

Seth’s experience covers a broad range of retirement plan designs, from traditional defined benefit to cash balance and floor-offset arrangements, ESOPs and 401(k) plans often coordinating qualified and non-qualified arrangements. He also advises tax-exempt and governmental employers on 403(b) and 457 arrangements, as well as innovative new plan designs; and he advises on ERISA compliance for investments.

Seth also advises for-profit and non-profit employers, compensation committees, and boards on executive employment, deferred compensation, change in control, equity and other incentive arrangements. In addition, he advises on compensation and benefits in corporate transactions.

On the health and welfare side, Seth helps employers provide benefits that are cost-effective and competitive. He advises on plan design, including consumer-driven health plans with HSAs, retiree medical, fringe benefits, and severance programs, ERISA preemption, and tax and other compliance issues, such as nondiscrimination and cafeteria plan rules.

Seth represents clients before the Department of Labor, IRS and other government agencies. Seth has been recognized by Chambers USA, The Legal 500, Best Lawyers, Law360, Human Resource Executive, Lawdragon and Super Lawyers.

Erik Hays | Proskauer Rose LLP

Erik Hays is an associate at Proskauer in the Tax Department and a member of the Employee Benefits & Executive Compensation Group.

Erik advises public and private companies and non-profit entities on their employee benefit plans and executive compensation arrangements, both in the context of day-to-day matters and in connection with corporate transactions. Erik works with both companies and executives in negotiating employment, separation and related agreements. He also assists clients in designing, implementing and administering short- and long-term cash and equity incentive plans. Erik provides expertise on complex tax issues arising under Internal Revenue Code Sections 280G, 409A, 83 and 162(m).

Prior to joining Proskauer, Erik was an Associate at Schulte Roth & Zabel LLP and a Manager in Ernst & Young’s People Advisory Services practice.

I. Key tax considerations unique to compensation arrangements of tax-exempt organizations | 1:00pm – 1:15pm

II. Entities and employees subject to Sections 457, 4958 and 4960 | 1:15pm – 1:30pm

III. Reasonable compensation and intermediate sanctions | 1:30pm – 1:45pm

IV. Section 4960 excise tax on excess compensation (including impacts of The One, Big, Beautiful Bill) | 1:45pm – 2:00pm

Break | 2:00pm – 2:10pm

V. Deferred compensation arrangements for tax-exempt organizations | 2:10pm – 2:20pm

VI. Reporting traps | 2:20pm – 2:30pm

VII. Best practices in structuring executive comp for tax-exempt organizations | 2:30pm – 2:40pm