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In case the CEO is reading this - Turn it into a employee-owned company!
by VikingCoder 4y ago
In case the CEO is reading this -
Turn it into a employee-owned company!
- thfuran 4y agoI don't think that's actually easy to do without causing all current employees to incur significant taxes.
- pessimizer 4y agoIt's also difficult to win the lottery without incurring significant taxes.
- ska 4y agoIn that case by definition you have the cash to pay the taxes.
- Tuna-Fish 4y agoNo, you don't. The issue is liquidity. If I gift you something that is of substantial value, but cannot be easily sold or used as a security, it can really fuck you over. There are jurisdictions that allow deferring the tax liability in such cases, but the USA doesn't do that.
- xboxnolifes 4y agoLottery winnings are liquid.
- Tuna-Fish 4y agoAh sorry, I misunderstood the post I was replying to. I was actually agreeing to it: Lottery winnings are different from major gifts of illiquid assets, because you can always just pay the taxes from the winnings. In any case, you become liable for the tax immediately after receiving the gift/winning. If you cannot do that without selling the asset, and the asset is impossible to sell in the short term, and you cannot take a loan against the asset, your best option can be to refuse the gift. And yes, this is a little bit insane.
- ska 4y agoI should have been clearer, but we were pointing out the same difference.
- deleted 4y ago[deleted]
- alasdair_ 4y agoGifts in the usa are taxable to the giver, not the receiver. (In most cases)
- babypuncher 4y agoThe difference is that lottery winnings are liquid, you can just pay your tax burden out of the winnings.
- iepathos 4y agoSimilarly, taxes are applied to capital gains when stock is sold, not when it is received or bought. The employees would not be taxed just for receiving the stock/ownership, only once they sold it and made it liquid.
- deleted 4y ago[deleted]
- double_nan 4y agoTaxes are due at vesting.
- davidlumley 4y agoTo be clear: taxes are due when you receive the shares. For options, that's when you execute/purchase your options not when they vest. edit: (in the US at least)
- johnebgd 4y agoThe taxes can also be due when you receive your options. That can depend on if you purchase your options or if they are granted to you and entitle you to a discount. YMMV but an NQSO purchase agreement can be your friend.
- girvo 4y agoNo, you can absolutely be taxed just for receiving the stock/ownership.
- ideamotor 4y agoIf it’s not worth much and it’s spread across many employees, we aren’t talking about much.
- kennend3 4y agoDepends on your tax laws. Here (Canada) lottery winnings are tax-free ;) https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/amounts-that-taxed.html https://www.canada.ca/en/revenue-agency/services/tax/individ...
- Havoc 4y agoThrow enough lawyers and structuring at it and you can definitely make it work. Not make the tax go away permanently...but phase it over time & ensure they get dividends along with it to cover bill etc.
- rch 4y agoExactly. I've had enough theoretical conversations about this to know there are organizations who would be happy to help assess any particular situation. Different industry, but it might be worth looking into how New Belgium went employee owned, with apparently equitable results: https://www.forbes.com/sites/christophermarquis/2020/05/01/employee-ownership-results-in-a-pay-out-of-more-than-200-million-to-workers/?sh=1bbdee8e1502 https://www.forbes.com/sites/christophermarquis/2020/05/01/e...
- VikingCoder 4y agoI know nothing... ...but give the current employees voting rights without equity, proportional to their seniority... (Or just 1 vote each.) And then start rolling out equity, maybe, depending.
- moffkalast 4y agoTaxes? You mean the thing poor people pay? /s
- vineyardmike 4y agoI’ve heard of companies doing something similar, but instead it’s a special class of stock (and the original one gets phased out through buybacks etc). This new class basically has a one time dividend that covers a chunk of taxes. Not sure in EVGAs case what laws govern their business and where employees are and what existing structure is… but where there’s a will, there’s a lawyer to make a way.
- s1artibartfast 4y agoI don't think that is true. There are a number of paths to convert to a employee owned coop that doesn't incur taxes for the employees. Easiest would be to convert to some sort of new 501 non profit with employee control. People don't have to pay taxes when they are hired at an employee owned company like winco, and students don't have to pay taxes when they join a housing coop.
- gnarbarian 4y agoOK, but they will still need a CEO.
- black_puppydog 4y agoYes but the CEO's role would be very different.
- yieldcrv 4y agoif anyone needs any inspiration, in Germany the company's employee labor union has a board seat or two, by law (for share based companies above a certain size). I just never see anything remotely close to that in the US discussions, by the people most interested in employee activism or union formation. I get the impression people don't even know its something to they could be putting energy towards. first English google result I could find on the concept https://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany/Board-level-Representation https://www.worker-participation.eu/National-Industrial-Rela...
- brnaftr361 4y agoAt every opportunity I drop Mondragon corporation. They have a long and impressive history, BBC had a documentary on it, which despite being filmed in the '80s, and worthless to them is being withdrawn from Youtube due to IP. Very interesting if you can find it, but most of anything I've seen written about the topic is. Actually: The Mondragon Experiment: https://vimeo.com/161252994 https://vimeo.com/161252994
- despacito 4y agoHoneycomb does this as well https://www.honeycomb.io/blog/employee-representative-board-of-directors/ https://www.honeycomb.io/blog/employee-representative-board-...
- bhhaskin 4y agoHow so?
- spoils19 4y agoAll companies are employee owned. Vote with your feet.
- mceachen 4y ago> All companies are employee owned False. Only a few are: https://en.wikipedia.org/wiki/List_of_employee-owned_companies https://en.wikipedia.org/wiki/List_of_employee-owned_compani...
- notafraudster 4y agoThe person you're responding to is not speaking literally; they're using what's called a metaphor to make a point that employees of any company exert walking power. The point may or may not be useful, but you have to finish reading the post before trying to reply with a gotcha correction.
- ClumsyPilot 4y agohas this power ever brought down a company? Has it made bosses responsible for worker injuries at work? Has it given maternity leave? if not, its not really power
- tssva 4y agoIt has.
- s1artibartfast 4y agoIt certainly has. Employees have real power. Power is not the same as ownership
- fabianhjr 4y ago> they're using what's called a metaphor It isn't a metaphor, it is, in the words of Zizek, pure ideology.
- sitkack 4y agoThey are such good board designers, they should open a design service.