Executive & Employee Taxation

Recruiting someone important, rewarding key people with salary or equity? Managing exits? The structure of the package can matter almost as much as its headline value.

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Are you attracting, rewarding or exiting key people?

We advise on the tax mechanics of remunerating executive talent. Whether you are structuring a package to secure a talented individual or group of employees - or being headhunted for a pivotal role - we advise on all stages of the employment lifecycle:

  • Recruitment & Top-Table Pathways: Structuring packages, share options, RSUs and growth equity to attract talent and create clear routes to business ownership without triggering immediate tax liabilities on unvested value.
  • Reward Strategy on the Way Up: Designing deferred bonuses, employee share schemes, LTIPs, and executive reward structures that keep key managers focused on long-term company value as they rise through the ranks.
  • Exits, Severance & Right-Sizing: Structuring severance compensation, ex-gratia payments, restrictive covenants and unvested equity when managing executive and employee exits, resolving disputes or right-sizing leadership.

We work with company boards, CFOs, and the employment lawyers drafting the agreements to ensure every package makes commercial sense and holds up under Revenue scrutiny.

Coventure Tax Consulting and Tax Unwrapped

What issue are you looking to resolve?

RECRUIT & OFFER EQUITY

“We’ve found key talent. How do we grant real equity upside without triggering a dry tax bill?”

We structure entry packages, growth shares with hurdle valuations, and restricted share clogs (s128B/C) to align incoming executives with long-term company growth while capping upfront tax. Where cap-table dilution is undesirable, we design phantom share schemes and cash-settled SARs. We also establish vesting schedules, handle unapproved option valuations, and defend hurdle rates directly with Revenue.

Executive recruitment and equity structure illustration

REWARD & BIK STRATEGY

“How do we optimize high-value reward while managing proprietary director tax traps?”

We navigate complex director rules—managing the 15% shareholding threshold, Class K PRSI status, Form 11 obligations, and s435 close company surcharge risks. For ongoing executive remuneration, we optimize pension funding around Standard Fund Threshold (SFT) limits, structure BIK wrappers for company vehicles and private healthcare, and establish tax-deductible keyman insurance policies.

Executive reward and BIK strategy illustration

AGREE AN EXECUTIVE EXIT

“We’re negotiating a departure. How do we structure the package and protect against Revenue risk?”

We analyze termination packages under Section 201 TCA 1997 to maximize statutory tax-free allowances, including the Basic Exemption, Increased Exemption, and SCSB calculations. We unbundle taxable notice pay (PILON) from ex-gratia sums, handle statutory exemptions for ill-health or death, and structure non-compete covenants under s127. Crucially, we stress-test settlement tax indemnities to shield both employer and executive from unexpected clawbacks.

Executive exit and severance illustration

CROSS-BORDER & MOBILITY

“Our executive works internationally. How do we manage cross-border PAYE and tax reliefs?”

We secure Section 989 PAYE Exclusion Orders to relieve Irish payroll requirements for executives working abroad. For inbound talent and mobile directors, we apply Special Assignee Relief (SARP), Foreign Earnings Deduction (FED), and Trans-Border Workers Relief. We also manage split-year claims, foreign tax credits, and complex annual reconciliations to secure legitimate tax refunds.

International executive mobility illustration

IMPLEMENTATION & LEGAL DESK

“We need specialist tax execution alongside our employment lawyers and board.”

We serve as the specialist tax desk for law firms drafting compromise and settlement agreements, and act as independent counsel to board remuneration committees before contracts are signed. We pre-audit incoming executive agreements for hidden tax exposures and handle mandatory annual Revenue equity returns, including Form RSS1, Form ESA, and Form ESS1 filings.

Implementation and legal tax desk illustration
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The Key Employee Who Wants Equity

“She doesn’t just want another €30,000. She wants a stake in the business.”

The first question is what economic participation the company actually wants to provide.

Existing shares, a new class of growth shares, options or another incentive arrangement can produce very different commercial and tax outcomes.

We consider valuation, voting rights, participation in future growth, tax on acquisition, eventual CGT treatment and what happens if the employee leaves.

Equity · valuation · incentives

Match the time spent attracting talent with time delivering the right package.

The most expensive package is the one where neither side gets what they negotiated for. Unmanaged tax exposures don't just waste capital, they erode the motivational power of the offer or incentive structure.

Strategic tax design closes that gap, ensuring every euro spent delivers maximum net executive value.

Frequently asked questions

Some of the questions that commonly arise when recruiting, rewarding, relocating or exiting key people.

Start with what you want the employee to receive economically. Do you want them to participate in the entire existing value of the company or only future growth? Should they have voting rights? What happens if they leave? Should they receive dividends? When can they sell? Once the commercial objective is clear, we can consider the appropriate share or option structure and its tax consequences.

It depends on the structure and value transferred. Giving an employee valuable shares for less than market value can create an employment tax charge. Options and appropriately designed equity arrangements can produce different timing and tax consequences. Valuation is often central to the analysis.

Tax equalisation is commonly used where an employer sends an employee on an international assignment. Broadly, the employee bears an agreed hypothetical home-country tax while the employer bears the actual tax cost arising from the assignment. The intention is that the employee should not receive an unexpected tax advantage or disadvantage simply because the employer asked them to work in another country.

Potentially. Ireland’s Special Assignee Relief Programme can provide valuable income tax relief for qualifying employees assigned or recruited to work in Ireland. There are detailed employer, employee, income and timing requirements, so eligibility should ideally be considered while the employment and relocation package is being designed.

Not automatically. Different elements of a termination package can receive different tax treatment. Contractual salary, payment in lieu of notice, bonus, ex gratia amounts, restrictive covenant payments, pension arrangements and damages need to be identified separately. The structure should be reviewed before the settlement agreement is signed.

Everything Tax

If it involves tax, talk to us.

If the issue is important, unusual or simply difficult to untangle, we can help you understand the position, identify the risks and work out what to do next.

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