Golden Parachute Rules Video

Summary

Section 280G of the Internal Revenue Code is intended to discourage excessive compensation (sometimes referred to as "golden parachute payments") to certain key executives. The Golden Parachute Rules prohibit a corporation from deducting certain "excess parachute payments" and impose a 20% excise tax penalty under I.R.C. Section 4999 on payments that are made to certain "disqualified individuals" receiving such payments. The Sections 280G and 4999 rules are triggered when an employee or independent contractor receives certain compensatory payments that, typically, are contingent on the consummation of a corporate transaction.