Multichannel audio coding is studied from a rate-distortion theoret- ical viewpoint. Two practical coding techniques, both of which are based on rate-distortion optimization, are also proposed. The first technique decorrelates a multichannel signal hierarchically using el- ementary unitary transforms. The second method rearranges a mul- tichannel signal into sub-signals and compresses them at optimized bit rates using a conventional codec. Both objective and subjective tests were conducted to illustrate the efficiency of the methods.