King & Spalding Advises Client on Expatriate Executive Benefits Programs

King & Spalding advised a publicly traded client with respect to the design and implementation of executive benefit programs for its expatriate workforce.  One component of this project related to compensating senior executives working abroad based on the performance of the client’s common stock. One significant challenge involved the client’s business need to avoid establishing a “presence” in a foreign jurisdiction which could result in adverse tax consequences. Maintaining an equity incentive plan for expatriates in this jurisdiction would have been a significant indicia of establishing a “presence.” To minimize this risk , King & Spalding assisted the client with designing a cash bonus plan tied to the performance of its common stock. This achieved the dual purposes of compensating the expatriates based on the performance of the client’s common stock and minimizing the risk of the client’s being deemed as establishing a “presence” in the foreign jurisdiction.