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Same reason I requested $0 salary this year... Seriously, this argument doesn't make sense to me? How can them spending more money help them make more because

Same reason I requested $0 salary this year... Seriously, this argument doesn't make sense to me? How can them spending more money help them make more because of taxes?

atemerev 7y ago
If you owned enough assets that could be used as a collateral, yes, you could request $1 salary. Many CEOs, Steve Jobs in particular, used to do that. He already had enough cash for day-to-day expenses (like buying a new Mercedes every 6 months); more significant expenses were financed... differently. You should be already rich and structure your capital properly for this to work.
conanbatt 7y ago
It would be better for you to collect stock on a company like google at 0$ salary, and just pay long term capital gains when you sell than salary. Makes a huge difference long term, as one is filled with payroll taxes and high rates, and the other is 15%.
- what_ever 7y ago
  That doesn't make sense. The stock grant will still be considered normal income to you and taxed as the salary is taxed. Any difference in the stock price after it vests and you sell will be either short term or long term capital gain. So if you consider getting all salary in cash and then buying GOOG (or any other stock) with it, you come off only a month or two late on the period for which you are holding the stock. And for that, you lose out on the diversity of the stock. This also assumes that your GOOG stock starts vesting immediately and there is no cliff. Otherwise, you will be holding the stock for "cliff" period longer if you just get cash salary and buy the stock. Disc: Googler but this comment doesn't have anything specifically to do with Google. Google is just an example here.
  - conanbatt 7y ago
    Of course, you want all your stock gains to fall under long term capital gain. Google already has the market price in, but all startups don't. If you make 200k a year for 10 years, vs get no salary for a startup for 10 years and then its sold out for 2 million dollars, they are completely different tax conditions. Im not an expert or have been through this, but if you sell 2 million dollars at 15% long term rate vs the 35~% + medicare of salary, the difference will be huge.
matt4077 7y ago
Yeah, it's a pretty stupid argument that has somehow become one of those contrarian memes people like to use to appear smart. I guess it's inspired by Amazon's history of reinvesting, but missing the point that Amazon's motive most certainly was to actually invest into growth. There are of course many companies that engage in all sorts of morally bankrupt but legal tax optimisation strategies. But Uber is rather different from, say, Apple, in that Uber has absolutely no need for creativity to depress their profit. They are haemorrhaging money the old-fashioned and totally legit way.

Same reason I requested $0 salary this year... Seriously, this argument doesn't make sense to me? How can them spending more money help them make more because of taxes?

atemerev 7y ago

If you owned enough assets that could be used as a collateral, yes, you could request $1 salary. Many CEOs, Steve Jobs in particular, used to do that. He already had enough cash for day-to-day expenses (like buying a new Mercedes every 6 months); more significant expenses were financed... differently. You should be already rich and structure your capital properly for this to work.

conanbatt 7y ago

It would be better for you to collect stock on a company like google at 0$ salary, and just pay long term capital gains when you sell than salary. Makes a huge difference long term, as one is filled with payroll taxes and high rates, and the other is 15%.

what_ever 7y ago
That doesn't make sense. The stock grant will still be considered normal income to you and taxed as the salary is taxed. Any difference in the stock price after it vests and you sell will be either short term or long term capital gain. So if you consider getting all salary in cash and then buying GOOG (or any other stock) with it, you come off only a month or two late on the period for which you are holding the stock. And for that, you lose out on the diversity of the stock. This also assumes that your GOOG stock starts vesting immediately and there is no cliff. Otherwise, you will be holding the stock for "cliff" period longer if you just get cash salary and buy the stock. Disc: Googler but this comment doesn't have anything specifically to do with Google. Google is just an example here.
- conanbatt 7y ago
  Of course, you want all your stock gains to fall under long term capital gain. Google already has the market price in, but all startups don't. If you make 200k a year for 10 years, vs get no salary for a startup for 10 years and then its sold out for 2 million dollars, they are completely different tax conditions. Im not an expert or have been through this, but if you sell 2 million dollars at 15% long term rate vs the 35~% + medicare of salary, the difference will be huge.

matt4077 7y ago

Yeah, it's a pretty stupid argument that has somehow become one of those contrarian memes people like to use to appear smart. I guess it's inspired by Amazon's history of reinvesting, but missing the point that Amazon's motive most certainly was to actually invest into growth. There are of course many companies that engage in all sorts of morally bankrupt but legal tax optimisation strategies. But Uber is rather different from, say, Apple, in that Uber has absolutely no need for creativity to depress their profit. They are haemorrhaging money the old-fashioned and totally legit way.