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Guest JeffG

Alternative time, same form, different amount

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Guest JeffG

Company pays executive different lump sum amounts for separation of service: (1) 2x salary upon separation, or (2) 2x salary plus pro rated bonus upon separation within 18 months of a CIC. The alternative time for payment upon separation of service appears to work because it's within two years of a CIC, and the form of payment is the same for both (lump sum). Does having a different amount violate 409A? Thanks in advance.

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Guest JeffG

I'm thinking my question above was a dumb one. All the company is really doing is paying more if the separation occurs within 18 months of a change in control. So the answer should really be the same as the conclusion from this post:

http://benefitslink.com/boards/index.php?showtopic=39663

The conclusion there was that the company could pay different amounts for different types of terminations (without cause, with cause, etc) without violating 409A because the time and form of payments were the same. If anyone can tell me how the situation described in that post is different from mine, above, please let me know.

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