Shearman & Sterling LLP Golden Parachute Provisions | 66
Golden Parachute Excise
Tax Gross-Ups
For the past six years, the number
of companies providing "golden
parachute" excise tax gross-up
protection has remained small.
Full Gross-Ups
Modified Gross-Up
Under a modified gross-up, payment
is only made if the change in control
payments exceed a specified amount
over the safe harbor. For instance,
a company may provide that it will
only pay a gross-up if the aggregate
amount of the change in control
payments exceeds the safe harbor
amount, generally by 10% or more.
At some companies, if the change
in control payments are below this
percentage, they will be cut back
to the safe harbor amount.
The gross-up is only
with respect to legacy
arrangements. There
are no new gross-ups.
2019 2020
of the Top 100 Companies
provides a full or modified
gross-up to one or more
of their NEOs
2
companies
1
company
1
For the third year
in a row, no Top 100
Company provides for
a modified gross-up
0
