What it is
Section 280G taxes payments above three times a base amount on sale, merger, or acquisition. The excess is disallowed to the company, and the recipient pays a 20% excise tax in addition to income tax. A board can vote a shareholder ratification to escape the excise tax.
What to do about it: The base amount is set from five years of compensation history. Get the calculation in writing, and check the plan language for a 280G cutback clause before your last day.
Plain-language description of US practice, not legal, tax, or financial advice. The paired guide carries the citations, dates, and thresholds; the state pages carry the local windows.