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Course Details

This CLE course will provide executive compensation and corporate attorneys, and ERISA retirement plan fiduciaries, with an in-depth analysis of the challenges, risks, and planning considerations for providing compensation in cryptocurrency in executive compensation arrangements, and access to cryptocurrency investment options in retirement plans. The panel will discuss long-term incentive plan design, the pros and cons of compensation programs that pay employees in cryptocurrency and other digital assets, IRS and DOL guidance, and other cryptocurrency-related compensation issues.

Faculty

Description

Several alternatives are available to companies for providing compensation and incentives to their executives and key employees. As cryptocurrency is increasingly accepted, some employers are considering cryptocurrency as part of compensation and incentive arrangements. However, these arrangements present intricate design, structuring, and tax challenges, including how to structure compensation and incentive arrangements with cryptocurrency, the application of Section 409A and other regulations, and other key items to consider.

Cryptocurrency as compensation or an incentive presents complex design and structuring challenges. Counsel must consider requirements under the Fair Labor Standards Act (FLSA), and state and local wage laws to effectively structure compensation that includes cryptocurrency for key executives and employees. Also, the IRS considers cryptocurrency "property" subject to capital gains tax rates. The IRS issued guidance confirming that any payment to employees in such currency must be reported on a W-2 based upon the currency's value at the time it was delivered to the employee. Therefore, cryptocurrency compensation is subject to income tax and withholdings.

Listen as our experienced panel of executive compensation and benefits practitioners discusses long-term incentive plan design, the pros and cons of compensation programs paying employees in cryptocurrency and other digital assets, IRS and DOL guidance, and other cryptocurrency-related compensation issues.

Outline

  1. Overview of IRS and DOL treatment of cryptocurrency
  2. FLSA requirements and DOL rules; the form of payment
  3. State and local wage law considerations
  4. Designing compensation and incentive plans inclusive of cryptocurrency
  5. Best practices for executive compensation and corporate attorneys and retirement plan fiduciaries

Benefits

The panel will review these and other key issues:

  • What are the critical considerations for including cryptocurrency in a compensation or incentive plan?
  • What is the DOL's position on cryptocurrency investment options in retirement plans?
  • What are the rules and requirements for the form of payment under the FLSA?
  • What are the potential tax ramifications of including cryptocurrency as compensation?
  • How do Section 409A and Section 83 apply?