What Shohei Ohtani Can Teach Employees about Deferred Compensation

Dec 13 2023

Amanda DeMatteis: Hi, Josh.

Josh Goodbaum: Hi, Amanda. What are we talking about today?

DeMatteis: Well, if you’ve watched the news at all recently, you’ve seen that Shohei Ohtani has signed a massive baseball contract for $700 million. But something that was interesting to me is he’s deferring so much of that compensation — a whopping 680 million bucks.

We’ve seen some deferred compensation contracts in the sports world before. Remember Bobby Bonilla Day, right? Every year, on July 1st, the Mets pay him something like $1.19 million, and they’re gonna do that until he’s 72. We saw Rafael Devers do something similar in early 2023. And I got to thinking: what should Connecticut employees know about deferred compensation? Is it something that makes sense for folks like us who aren’t making $700 million to do?

Goodbaum: Well, it might, Amanda, and there are a surprising number of employees in Connecticut and around the country at all ranges of income who have some sort of deferred compensation. So, here are a few important things that people need to keep in mind.

Number one: Deferred income has tax consequences. As I tell my clients all the time – I know you do, too – I’m not a tax lawyer; I’m not an accountant. But you should probably talk to one if you’re thinking – like Shohei Ohtani might – that when I get this $680 million starting 10 years from now, I’m gonna live in Japan, and there’s gonna be a different tax rate than California. You might want to, you know, double-check that. My guess is Shohei Ohtani has got some pretty good advice. He’s got some sophisticated accountants. But that is worth it for everyone to look into. So talk to an accountant.

Second: Is your deal in writing? Is it well documented? Have you done enough to make it clear what’s happening so that you’re going to avoid a dispute down the road where you say, “Hey, employer, I know I’m not working there anymore, but you still owe me money.” And the employer says, “I don’t know what you’re talking about,” right? You wanna have it documented in writing clearly. Use a lawyer to document this stuff. This is worth paying a lawyer to memorialize.

And third: Just practically, you’re deferring the money down the road. You’re not gonna get paid for a while. How sure are you the money is gonna be there? You know, if the L.A. Dodgers are bankrupt come 10 years from now – and that’s probably pretty unlikely – Shohei Ohtani may not get a dime, or he’s gonna get 10 cents on the dollar, right, out of some bankruptcy court. So if you’re an employee in Connecticut, thinking about taking deferred compensation – for example, from a start up – you want to think about what are the risks that the money is not going to be there when I’m relying on it to appear.

So, just a few things to keep in mind. We’re not all Shohei Ohtani. Most of us will never see $700 million. But all of us can take a few lessons from the situation that he now finds himself in.

DeMatteis: That’s great advice. Thank you so much for sharing, and thank you for watching. We’ll see you next time.

Share this Post

Josh Goodbaum

About the Author

Garrison, Levin-Epstein, Fitzgerald & Pirrotti, P.C.

Advocating for Employees
since 1977

Best Lawyers

Let Us Review Your Case

    We will respond to your message promptly. Although we will keep your message strictly confidential, please note that contacting us does not create an attorney-client relationship.

    Client Experiences

    During a very difficult employment situation, I was referred to Joe Garrison. Recognizing the volatile and time sensitive nature of my employment situation, Mr. Garrison met with me immediately (on the weekend no less). He listened to the details of my case, was able to think through possible creative solutions to offer the employer, and was responsive to my myriad of questions. He understood my concerns about litigation versus settlement, and he worked to find the best resolution possible. I am grateful to have had his support at a very difficult time. —J.C., New Haven, CT

    You will never meet a more knowledgeable and compassionate professional than Steve Fitzgerald. My employment situation was very complex, and Attorney Fitzgerald kept me focused while remaining extremely adept and “thinking on his feet.” Should the need present itself again, I would never seek anyone else’s counsel regarding employment issues. I cannot recommend him highly enough. — J.R., New Haven, CT

    Nina Pirrotti provided outstanding legal advice and was trustworthy, dependable, and responsive. From the start, I was confident that her knowledge and experience would obtain favorable results. On a more personal note, I enjoyed working with her and her staff and felt I was included in every part of the process. The dedication, concern, and interest in me as a client was greatly appreciated, and Nina has earned my highest recommendation. — J.H., Monroe, CT

    I recently found myself in need of a lawyer in handling a dispute with my former employer. I was fortunate to retain Josh Goodbaum as my legal counsel. His legal skills knowledge and professionalism shone through in every step of the process resulting in a very positive result. I highly recommend Josh if you find yourself in need of legal counsel. — S.R., Guilford, CT

    When I go to a lawyer for advice, I am usually anxious, particularly the first meeting. Amanda DeMatteis was clear in describing my options and immediately set me at ease. Realistic assessment is important, and Amanda was clear as to how to set up the case and the direction she felt we should go. I had total confidence in her abilities and knew I was being well represented against a large corporation. More importantly, we were successful! —N.M., Haddam, CT

    Advocating for Employees since 1977

    American Law Institute Super Lawyers American College of Trial Lawyers Best Lawyers The College of Labor and Employment Lawyers
    Back to Top
    (203) 815-1716