NTA2206. Planning with Stock Options & Partnership Profit Interests

Corporate stock options and partnership profit interest, while economically similar, have distinct differences that impact the tax implications of the service provider. In this session we will compare and contrast the two forms of equity-based compensation, including the differences in taxation, and consider alternatives to these awards, such as deferred compensation and appreciation rights. Also, we will consider the factors employers and service providers should consider when granting or receiving these awards, including whether it makes sense to convert employees into partners through profit interests.

Learning Objectives:

• Determine various alternatives to stock options and profits interests
• Identify the difference between a profits interest, a capital interest and a stock option
• Compare the effect of employee share ownership vs partner unit ownership