Section 409(a) of the Internal Revenue Code provides that a stock option granted under a nonqualified deferred compensation plan that has an exercise price equal to less than the fair market value of the stock as of the date of the grant constitutes taxable deferred compensation. The adverse consequences of such an arrangement include taxation at the time of vesting and a 20% penalty. A third party valuation can be an important part of the proper structuring of stock option plans so that such negative consequences are avoided.

  • Acrisure

    a portfolio company of

    Genstar Capital, LLC

    409(a) valuation

  • Michael Foods, Inc.

    a portfolio company of

    GS Capital Partners

    409(a) valuation