Employee Compensation Services
Take the payroll burden off your plate for your next M&A transaction.
The Problem: Payments to Former employees. Escrow. Tax rules—A mess.
During the company sale or acquisition, equity awards tied to escrow often trigger a hidden headache: former employees still need to be paid out, and the IRS requires that payout must be treated as W-2 compensation based on their employment status at the time of grant.
But what happens when those individuals are no longer employed or never seek employment?
Buyers are stuck with the complex administrative burden of keeping former employees on payroll just to issue a W-2 and handle withholding for the escrow release, milestone or deferred consideration. That means:
- Managing benefit eligibility, 401(k) triggers and legal exposure
- Chasing down updated addresses and payment instruction
- Getting zero help from most escrow agents
The Fix: Employee Compensation Payment Services from Western Alliance Bank.
We take on the heavy lifting — so you can stay focused on your day-to-day. With Employee Compensation Payment Services, we:
- Identify, track and pay former employees on your behalf
- Calculate and remit federal, state and local tax withholdings to the proper tax authorities
- Issue W-2s under our own FEIN and handle delivery and questions from former employees
- Preserve wage base history so you don’t overpay FICA (unlike most agents, who reset to zero)
- Handle address and residency updates to ensure compliance
- Let you bifurcate escrow — you process payroll to current employees, we handle the rest
Whether we’re your paying agent or providing this service as a standalone service, our team plugs into your transaction and removes friction where you need it most.
Why It Matters
Employee compensation is where deals get messy. We make them smooth. Western Alliance Bank is trusted by top legal, finance and treasury teams to solve for real-world complexity — before it becomes a problem.
Reach a Banker
Contact Our Business Escrow Services Team