Mitigating the Pain of Equity Compensation in a Down Market
Michael E. Mooney
Nutter, McClennen & Fish, LLP
Tax Notes, Vol. 93, No. 8, November 19, 2001
The dramatic decrease in equity values since early 2000 has left many executives and directors, and the companies with whom they work, facing the dilemma of how to deal with awards made under equity compensation programs at what appear now to be inflated values. In this report, Mooney explores ways to mitigate the adverse impact of these value reductions and the tax and other consequences of doing so. He concludes that there are several ways to deal with an unexpected price decline, but warns that time may be of the essence in achieving an effective solution to the problem.
JEL Classification: J33, H24, H25
Date posted: November 21, 2001
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