280G and Performance Awards: Full Value, Time-Based Value, or Somewhere in Between?
A $1.2 million performance award can trigger two very different 280G outcomes: the full amount treated as contingent on the deal, or a smaller acceleration-only amount, depending on one fact most equity reports never capture. Here’s the distinction that decides which framework applies: whether the performance condition was certified before the transaction closed.
When Does 280G Become a Problem in Transactions?
280G exposure rarely shows up where companies expect it. The risk often goes unidentified until a transaction is already underway, and by the time a buyer requests analysis or proxy disclosures are being drafted, the flexibility to address it has usually narrowed. Understanding why timing matters, and where growth-stage companies face outsized exposure, is what separates a manageable issue from a last-minute scramble.
Understanding Section 280G and Golden Parachute Rules in Change-in-Control Transactions
Section 280G and Golden Parachute Rules aren’t just a tax issue — they’re a deal issue. This article covers how the rules apply in change-in-control transactions, who is affected, and why early analysis can change outcomes for companies, executives, and transaction teams.