Lawyers & Professionals

Firm Overview

Instead of trying to be everything to everybody, we’ve made a name for ourselves by delivering what our clients need most: in-depth, hands-on legal counsel throughout the financial services sector — and beyond.

Get to know us

Firm News

There’s a lot going on at Schulte — we’re wrapping up high-profile matters, welcoming talented new lawyers, speaking on issues that affect our clients, and more.

Read all about it

Pro Bono

Throughout our history, Schulte has provided comprehensive pro bono services to local and national nonprofit organizations. Today, we serve more than 50 nonprofits and work to advance a variety of social justice causes.

Learn more

Diversity and Inclusion

Inside the firm, we work hard to attract diverse, talented lawyers and encourage their career growth and advancement. And outside the office, we’re active in volunteer drives and local initiatives that support women and minorities’ professional success.

See what we’re up to


If you’re a current or former Schulte lawyer, join our Alumni Network on LinkedIn to stay connected with old friends, make new contacts, and share your successes, ideas and insights.

Stay in touch

Social Responsibility

We take doing “good work” seriously — whether we’re talking about our high ethical standards or the way in which we foster a positive and inclusive culture for our personnel and support local communities.

See how we work


  • New York

    • 919 Third Avenue
    • New York, NY 10022
    • United States of America
      • +1 212.756.2000 Phone
      • +1 212.593.5955 Fax
  • Washington, D.C.

    • 1152 Fifteenth Street, NW, Suite 850
    • Washington, DC 20005
    • United States of America
      • +1 202.729.7470 Phone
      • +1 202.730.4520 Fax
  • London

    • One Eagle Place
    • London SW1Y 6AF
    • United Kingdom
      • +44 (0) 20 7081 8000 Phone
      • +44 (0) 20 7081 8010 Fax

President Trump signed the Tax Cuts and Jobs Act of 2017 on Dec. 22, 2017. Effective as of Jan. 1, 2018, the Act adds Section 4960 to the Internal Revenue Code (“Code”), which imposes a new 21 percent excise tax on “Compensation” paid by an “Applicable Tax-Exempt Organization” with respect to employment of any Covered Employee. The employer is responsible to pay the excise tax, even if the amount paid is determined to be reasonable under the intermediate sanction rules. For purposes of Section 4960, the following terms are defined:

  • “Compensation” means the sum of W-2 wages in excess of $1 million, plus any excess parachute payments. Compensation that is not vested (for example, deferred compensation under a 457(f) plan that is subject to substantial risk of forfeiture) is not counted until the risk lapses and it becomes vested.
  • “Excess parachute payments” are payments, like severance, which are made contingent upon a covered employee’s termination from employment in an aggregate amount greater than or equal to three times the employee’s five-year average base compensation, and the tax applies to the excess parachute payment even if the W-2 wages are less than $1 million. There is an exception for parachute payments to individuals who are not highly compensated employees as defined by Code Section 414(q) (i.e., for 2018, this means employees who earned less than $120,000 in 2017).
  • “Covered Employee” means any employee who is one of the five highest compensated employees of the organization for the current taxable year or any preceding taxable year beginning after 2016. Once an employee qualifies as a Covered Employee, the employee will always be treated as a Covered Employee in future years even if he or she is no longer one of the five highest compensated employees of the organization. As a result, organizations can have more than five covered employees.
  • “Applicable Tax-Exempt Organization” includes 501(a) tax-exempt organizations and their related organizations. The provision defines related organizations broadly, and includes entities that are controlled by the organization, are controlled by the same person or people who control the organization, supported and supporting organizations, and if the organization is a voluntary employee benefit association (“VEBA”), organizations that make contributions to the VEBA. Employers likely to be affected by this law include large universities, cultural institutions and hospitals. An exception was made to carve out compensation paid to licensed doctors and veterinarians for the performance of medical or veterinary services by such professionals. State employees, including employees of state organizations, appear to be covered by this.

Under the Code, existing deferred compensation arrangements will be treated as paid when the amounts are no longer subject to a substantial risk of forfeiture or “vested.” There is generally no ability to accelerate payment of certain deferred compensation to avoid the excise tax. One might be able to extend the vesting date by at least two years, if the deferred compensation is increased by at least 25 percent; this approach, however, would appear to exacerbate the problem rather than minimize it.

Tax-Exempt Organizations should review their existing employment contracts, 457(f) deferred compensation plans, severance and compensation arrangements to understand which employees are covered and whose compensation is potentially impacted by the new excise tax. Going forward, while the Tax-Exempt Organization will be responsible to pay for the tax, employers will need to budget this new excise tax into their compensation planning. When setting compensation or agreeing to provide severance payments, Tax-Exempt Organizations will need to analyze the impact of this excise tax and plan accordingly. For example, they may offer lower compensation in recognition of the tax, cap compensation to avoid the tax, or maintain the right to modify or reduce compensation to the extent needed to avoid the tax. In addition, when entering into agreements that provide for parachute payments, Tax-Exempt Organizations may require the departing employee to cover the excise tax amount out of his or her parachute payment.

Authored by Mark E. Brossman and Susan E. Bernstein.

If you have any questions concerning this Alert, please contact your attorney at Schulte Roth & Zabel or one of the authors.

This information and any presentation accompanying it (the “Content”) has been prepared by Schulte Roth & Zabel LLP (“SRZ”) for general informational purposes only. It is not intended as and should not be regarded or relied upon as legal advice or opinion, or as a substitute for the advice of counsel. You should not rely on, take any action or fail to take any action based upon the Content. This information or your use or reliance upon the Content does not establish a lawyer-client relationship between you and SRZ. If you would like more information or specific advice on matters of interest to you please contact us directly.

As between SRZ and you, SRZ at all times owns and retains all right, title and interest in and to the Content. You may only use and copy the Content, or portions of the Content, for your personal, non-commercial use, provided that you place all copyright and any other notices applicable to such Content in a form and place that you believe complies with the requirements of the United States’ Copyright and all other applicable law. Except as granted in the foregoing limited license with respect to the Content, you may not otherwise use, make available or disclose the Content, or portions of the Content, or mention SRZ in connection with the Content, or portions of the Content, in any review, report, public announcement, transmission, presentation, distribution, republication or other similar communication, whether in whole or in part, without the express prior written consent of SRZ in each instance. The contents of these materials may constitute attorney advertising under the regulations of various jurisdictions.