Section 280G was enacted to protect shareholders’ interests by prohibiting companies from making excessive payments to unqualified individuals when control of a corporation changes hands. Only public and private corporations are covered under Section 280G. It does not apply to partnerships taxed as S-Corps, Partnerships, or LLCs. Golden parachute payments are both limited in amount and subject to a special excise tax under Section 280G. The rule only applies if the payment is worth more than or equal to three times the disqualified individual’s average annual taxable compensation during the five years immediately preceding the change in control.