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Can't this be mitigated to a large degree by setting the value per share to an tiny fraction of a dollar? Sure, you'll have a tax to pay when the shares are gra
by Mtinie 10y ago
Can't this be mitigated to a large degree by setting the value per share to an tiny fraction of a dollar? Sure, you'll have a tax to pay when the shares are granted, but it should be reasonable.
I could get behind the scheme you commented with, but I'm unsure of generally why we have the system we currently do, so I would want to understand the rationale for the status quo.
- hx87 10y agoIt probably has something to do with preventing creative ways of liquidating illiquid assets, such as borrowing against the assets and promptly defaulting.
- x0x0 10y agoIn my understanding, there's huge tax penalties, both to employer and employee, for giving employees in the money options. Thus options have to be granted with a strike that is fmv or something approximating it. Excessively sandbagging the valuation would, I think, be consider doing the above. Further, you don't think businesses are averse to golden handcuffs, do you?