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While a public company answers to it's shareholders, it also has a responsibility to support the community it lives within, because often success can be directl
by jrowley 10y ago
While a public company answers to it's shareholders, it also has a responsibility to support the community it lives within, because often success can be directly attributed to where the company started. Aggressively avoiding taxes could very well be considered unethical by some parties.
- Phlarp 10y agoSome may consider avoiding taxes to be unethical, others might say not avoiding them would violate a fiduciary duty.
- reitanqild 10y agoFrom my very minimal accounting course I remember my teacher, who was serving as part of the tax appeals board at the time, telling us that we were allowed to use any opening in the law to save tax but we were not allowed to lie.
- Phlarp 10y agoThe intent of my comment was to draw attention to the other side of this coin. >You are allowed to use any opening in the law to save on taxes, but not lie. The other side of that is: If you (as a C(ETF)O of a company) do not use every opening in the law to save on taxes you may be violating a fiduciary duty to your shareholders.
- cmdrfred 10y agoOddly enough nobody is concerned with fiduciary duty when a CEO pulls a few million dollar bonus out of a failing company.
- ryanlol 10y agoThe CEOs don't set their comp. Also, depending on the company "a few million dollars" isn't even a meaningful amount of money.
- PeterisP 10y agoThe shareholders and board very much are, although for a failing company often they will set up a CEO with the explicit goal to wind down the company my milking it to death (which often takes many months or years, and starts long before employees would be notified about the plan) and offer multimillion bonuses conditional on extracting dozens more millions for shareholders from a dead horse by riding it in sunset until all that's left is debt to "someone else".
- deleted 10y ago[deleted]
- drumdance 10y agoWhen people bring up "fiduciary duty" in either a taxes or outsourcing context (i.e. it's Apple's fiduciary duty to build its products in China), I always ask for a pointer to a successful lawsuit in which this particular fiduciary duty was enforced. Yes, in theory it's their fiduciary duty to minimize taxes, but I've never heard of a board being sued because they didn't squeeze every last dollar out of their tax bill.
- kbenson 10y agoFirst link in the quick Google search I did, which starts with a story where Henry Ford wanted to stop paying special dividends to partial owners. "At trial, Ford testified to his belief that the company made too much money and had an obligation to benefit the public and the firm’s workers and customers." The judge did no agree. I haven't read the whole article yet, but it seems definitely to apply (and also notes there is little precedent in this area). 1: http://www.professorbainbridge.com/professorbainbridgecom/2012/05/case-law-on-the-fiduciary-duty-of-directors-to-maximize-the-wealth-of-corporate-shareholders.html http://www.professorbainbridge.com/professorbainbridgecom/20...
- rhizome 10y agoI'd say a 100 year old case speaks to a lack of enforcement of fiduciary duty in the courts.
- Phlarp 10y agoOn the other hand, "Henry Ford got smacked for it" speaks loud enough to stop most executives and their corporate lawyers from testing the waters. Even if some time has passed.
- ryanlol 10y agohttp://www.delawarelitigation.com/uploads/file/int51%281%29.pdf http://www.delawarelitigation.com/uploads/file/int51%281%29....
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- spacecowboy_lon 10y agoSo you are of course not taking any advantage of Pension tax reliefs in your 401K and IRA's ?
- jrowley 10y ago401K/IRA tax avoidance techniques are codified in law to encourage people to save for retirement so we don't have generations of elderly homeless people. The tax loopholes that companies like Apple tax advantage of are another thing entirely.
- ryanlol 10y ago>The tax loopholes that companies like Apple tax advantage of are another thing entirely. No, the significant ones (i.e. offshore subsidiaries) are very much codified.