Hi Andrew. I've enjoyed your posts here.

Is 409A too tough for law school? The short answer is yes.

Assuming you are teaching JDs and not LLMs, I would focus on (1) explaining some of the gamesmanship that led to the legislation (remember, this is ancient history to them) and (2) the basic structure of the regime. For most of your students, the goal is to have them recognize situations where 409A may come into play, not to remember all of the specific rules of how the regs put the statute into action.

I would add that executive compensation rules are highly subject to change, all the more so nowadays. So I would emphasize more broadly how to think about these issues, and then perhaps use a few specific examples to train in how to read a statute. For the statutory emphasis, I would not use 409A -- I find section 83 works well, as does 162(m).

Andrew,

I agree with Vic. I'd explain the background and the significant rules, particularly the requirement to specify distribution dates in advance and the inability to change them.

Also, you could use 409A as evidence of a complete and utter legislative disaster--a gigantic overkill. It's like killing a gnat (the stupid little games that Enron was playing) with a bazooka while ignoring the hungry lion in the room (the general tax benefits of deferred comp and equity comp that people still can get). And, to make matters even worse, the statute is a technical nightmare, as the regulation drafters have been figuring out.

I basically agree with Gregg and Vic. Stick to the statute. The first line of 1.409A-1(a) should start "Abandon all hope, you who decide to read this crap." The statute itself isn't all that bad, but won't make sense without a good bit of history (Enron, 1978 proposed regs, all those constructive receipt cases the IRS lost). This is probably a worthwhile exercise, though. If I were teaching, my bottom line would be that constructive receipt was an incredibly weak doctrine but strengthening it has proven to be disastrous.

The interesting issue, I think, is why any of this matters. Doctrinally, the difference between property (83) and promise (409A etc) should be highlighted. Economically, Albertson's and Halperin's Time Value of Money article are pretty accessible. One could say a lot more (as Gregg and I have), but restraint would probably be in order here.

I hope you'll share your syllabus when you're done. I've thought of dropping my ERISA class for an executive compensation offering a few times.

I don't think 409A is really any harder than many things we teach in law school: it, is, however, very convoluted and unusually stupid. I would devote little time to it unless I were teaching an advanced executive comp class, perhaps at the LLM level. And, of course, if one is dealing with a tax exempt or governmental employer, one also has to worry about 457(f).