In this article, the authors review the complex penalty tax rules governing golden parachute payments. Recently finalized Treasury regulations, generally effective January 1, 2004, have made numerous changes (some clear and some subject to debate) to the rules governing payments by a corporation to an executive contingent on a change in the corporation's ownership or control. The authors give an in-depth explanation of the tax treatment of golden parachute payments, analyze how the newly issued regulations alter the executive compensation landscape, and provide numerous examples to illustrate the rules' application