In a change of control, executive payments that cross the parachute threshold trigger severe consequences: lost deductions for the company and a 20% excise tax on the executive under IRC §280G and §4999. One of the most powerful mitigants is proof that payments are reasonable compensation for services actually rendered — a factual, market-based showing that must be built, documented, and ready to defend.
When counsel retain us
We are engaged in transaction planning to substantiate the reasonable compensation position before signing, and in post-closing disputes — with the IRS or between parties — where the characterization of change-in-control payments is contested.
How the opinion is built
The analysis documents what the executive’s services were worth: market pricing of the role, the scope of duties before and after the transaction, and the relationship between pay and performance. Because the reasonable-compensation showing carries a substantial evidentiary burden, the documentation standard is the same one we apply in litigation — every conclusion traceable to its support, prepared by experts who have testified on compensation questions in venues nationwide.
If this question is live in a matter you are handling, request a conflicts check — an initial conversation costs nothing and quickly clarifies whether an independent compensation expert strengthens your case. Our methodology and engagement structures pages explain how we work.