Non-Statutory Deferred Compensation Plans

Among the many key considerations in structuring a long-term strategic ownership transition plan for a professional design firm, is the overall affordability of the plan for the firm, its owners and key employees.  The retirement horizon of the firm’s current owners, the growth of the firm’s practice and the financial condition of the firm all impact the plan’s affordability for those integrated in the long-term strategic ownership transition plan.  In addition, professional licensing statutes in various states often preclude non-licensed key employees from participating in the firm’s internal ownership plan.

Non-statutory deferred compensation plans are often used as a vehicle to enhance the affordability of an internal ownership transition plan based on the specific facts and circumstances.  In addition, deferred compensation plans can also provide non-licensed key employees with all the risks and rewards of ownership even if they are precluded from legally owning an interest in the firm.  Such plans can take the form of phantom stock plans, stock appreciation rights (SARs) and other types of bonus plans.

Our principals are experts in the use of non-qualified deferred compensation in connection with key employee compensation and/or ownership transition in design firms.  We can assist you in evaluating the effectiveness of such plans with the circumstances unique to your firm, provide you with ongoing guidance throughout your firm’s transition process.