Structuring Severance: Tax Characterization and Unemployment Benefit Consequences of Separation Pay

Marshall Mort, Partner | Fenwick & West LLP

Marshall Mort is a partner in the corporate group at Fenwick & West LLP in Silicon Valley, where his practice centers on executive compensation and employee benefits — the discipline in which severance packages, separation agreements, and change-in-control arrangements are designed and taxed. A Chambers-ranked practitioner and frequent speaker on Section 409A deferred compensation compliance — the tax regime that dictates how separation pay must be structured, timed, and characterized — he brings exactly the technical command this program demands.

• Education & Credentials

Mr. Mort earned his J.D. from the University of California, Berkeley, School of Law, where he was elected to the Order of the Coif, and his B.S. and B.A., magna cum laude, in Accounting, English, and French from Santa Clara University — an accounting foundation that anchors his tax-driven compensation practice. He is admitted to the California Bar.

• Recognition & Leadership

Mr. Mort has been ranked by Chambers USA for Employee Benefits & Executive Compensation every year from 2023 through 2026, was named to The Best Lawyers in America “Ones to Watch” list for Employee Benefits (ERISA) Law, and was recognized as a Northern California Super Lawyers Rising Star in Employee Benefits from 2014 to 2021. He is a frequent presenter on Section 409A deferred compensation compliance and equity compensation design for accredited programs and industry audiences.

• Professional Involvement

Mr. Mort advises companies at every stage — from venture-backed startups to public companies — on the design, tax treatment, and compliance of compensation and benefits arrangements, including the deferred compensation rules under Section 409A that govern when and how separation pay can be promised and paid. His practice spans the technology, life sciences, fintech, games, and AI sectors, where workforce transitions and executive separations are a constant feature of the deal landscape.

• Experience

Mr. Mort has handled the compensation and benefits dimensions of some of the market’s most significant transactions — including Wiz’s $32 billion acquisition by Google, Figma’s proposed $20 billion combination with Adobe, and WhatsApp’s $19 billion acquisition by Facebook — deals in which the treatment of employee separation pay, accelerated equity, and severance obligations carries enormous tax consequences. That transactional depth, paired with his 409A expertise, makes him uniquely positioned to walk attendees through the tax characterization of separation pay and the drafting choices that determine its treatment.

Lauren M. Hoye, Partner | Willig, Williams & Davidson

Lauren M. Hoye is a partner at Willig, Williams & Davidson in Philadelphia, where she represents labor unions and employees in courts, arbitrations, negotiations, and administrative proceedings — including hundreds of unemployment compensation cases at every level in Pennsylvania and New Jersey. Her front-line command of how separation pay actually affects a worker’s eligibility for unemployment benefits supplies the perspective at the heart of this program: what severance structuring means for the employees who receive it.

• Education & Credentials

Ms. Hoye earned her J.D., magna cum laude, from the University of Pittsburgh School of Law, where she was elected to the Order of the Coif; her M.S.W. from Washington University in St. Louis; and her B.A., with honors, from Grinnell College. She is admitted to practice in Pennsylvania and New Jersey, the U.S. District Courts for the Eastern and Middle Districts of Pennsylvania, and the U.S. Court of Appeals for the Third Circuit.

• Recognition & Leadership

Ms. Hoye was named 2026 “Lawyer of the Year” for Labor Law – Union in Philadelphia by The Best Lawyers in America©, has been recognized by Best Lawyers since 2024, and has been selected to the Pennsylvania Super Lawyers list every year since 2021 after six years on its Rising Stars list. She is a frequent speaker and instructor for the American Bar Association, the Pennsylvania Bar Institute, the Pennsylvania Labor Relations Board and Bureau of Mediation, the AFL-CIO Union Lawyers Alliance, and the Labor and Employment Relations Association.

• Professional Involvement

Ms. Hoye serves as an arbitrator in the Philadelphia County Court of Common Pleas compulsory arbitration program and has been a board member of the AFL-CIO Lawyers Coordinating Committee since 2010. She is an active member of the Philadelphia, Pennsylvania, and American Bar Associations, and volunteers with the Support Center for Child Advocates representing abused children in the child welfare system.

• Experience

In more than fifteen years advocating for workers and their unions, Ms. Hoye has handled hundreds of unemployment compensation cases before referees, boards of review, and the appellate courts of Pennsylvania and New Jersey, alongside employee benefits matters and litigation through the Third Circuit and the Supreme Court of Pennsylvania. She knows firsthand how severance characterization, allocation, and timing determine whether a separated worker keeps or loses unemployment benefits — making her uniquely positioned to show attendees the benefit consequences that flow from every separation pay structuring decision.

Christophe Delrieu, Associate | Fenwick & West LLP

Christophe Delrieu is an associate in the corporate group at Fenwick & West LLP in Silicon Valley, where he advises on a broad range of executive compensation and employee benefits matters for clients in the technology and life sciences industries. Trained in corporate and tax law and seasoned in-house in the tax department of Oracle, he approaches severance and separation pay from the tax side first — precisely the lens this program applies to the characterization and benefit consequences of separation pay.

• Education & Credentials

Mr. Delrieu earned his J.D. in Corporate and Tax Law from Paris University and a master’s degree from HEC Paris School of Management, one of Europe’s premier business schools. He is admitted to the California Bar and is fluent in French and Spanish.

• Recognition & Leadership

Mr. Delrieu brings a distinctive cross-border perspective to compensation work, having practiced at major French law firms and served in the tax department of Oracle before joining Fenwick — a combination of private-practice and in-house tax experience that gives him firsthand insight into how employers actually analyze, report, and defend the tax treatment of compensation arrangements, including separation pay.

• Professional Involvement

At Fenwick, Mr. Delrieu supports companies across the technology and life sciences sectors on the design and tax treatment of compensation and benefits arrangements, from equity programs to the agreements that govern executive and employee separations. His client work has included representations of companies such as Stripe, FORT Robotics, CesiumAstro, Scribe Therapeutics, and Kentik in corporate transactions and public offerings.

• Experience

Mr. Delrieu’s practice sits at the junction of corporate transactions, compensation design, and tax — the three disciplines that converge in every severance package. His formal tax training, in-house experience at one of the world’s largest technology companies, and current focus on executive compensation and employee benefits make him well positioned to break down how separation pay is characterized for tax purposes and how structuring choices ripple into withholding, reporting, and unemployment benefit outcomes.

SESSION 1 – Taxing Severance and Settlement Pay: Characterization, Allocation, and Reporting | 12:00pm – 1:00pm

This session covers the federal tax characterization of severance and settlement payments, the allocation mechanics that determine W-2 versus 1099 reporting, and the FICA treatment of separation pay. Attorneys will learn about the taxability of severance benefits, and how to structure such payments to comply with Code Section 409A. Attorneys will also learn about the unique requirements involved when accelerating equity awards in a separation context. Participants will leave able to identify common drafting failures that produce adverse tax results.

BREAK | 1:00pm – 1:10pm

SESSION 2 – Severance and Unemployment Benefits: Drafting Separation Agreements Around UC Offset Rules — Lessons from Pennsylvania and New Jersey | 1:10pm – 2:10pm

This session examines how unemployment compensation offset rules interact with severance pay and how attorneys can structure separation agreements to minimize adverse UC consequences for departing employees. Using Pennsylvania and New Jersey—two neighboring states with different approaches to severance—as its working case studies, the session walks through how severance is classified and offset in each state and the drafting levers that can shift outcomes. A brief overview of the various approaches to severance pay as it relates to unemployment compensation will allow attendees in other jurisdictions to recognize which model their state follows, and know when local counsel is needed. Attorneys will leave with practical guidance to achieve best outcomes for their clients.