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Stripe is raising $3.5 billion to help pay the tax (tax rate 22%?) on (some of) the bonuses of its employees from the last 13 years. In no year has Stripe ever

Stripe is raising $3.5 billion to help pay the tax (tax rate 22%?) on (some of) the bonuses of its employees from the last 13 years. In no year has Stripe ever made a profit. For comparision in 2019 Stripe had 4,000 employees, Credit Suisse 50,000. https://www.bloomberg.com/news/articles/2023-03-06/stripe-details-3-5-billion-tax-bill-in-latest-fundraising-round https://www.bloomberg.com/news/articles/2023-03-06/stripe-de... Prev: https://news.ycombinator.com/item?id=35058846 https://news.ycombinator.com/item?id=35058846

zorked 4y ago
> In no year has Stripe ever made a profit. This doesn't mean that a bonus structure isn't appropriate. Bonus are supposed to be an incentive. Achieve bold goals -> get bonus. If anything this is more important in growing companies than in stable, profitable companies, which have achieved a sustaining business model. Why pay a bonus to people just following the algorithm. No judgement on Stripe's specifics.
- deleted 4y ago
  [deleted]
mirashii 4y ago
> on the bonuses of its employees from the last 13 years. It feels like this is misrepresenting the situation quite a bit. This is not a tax bill on bonuses. This is a tax bill on equity, which is a part of the regular compensation package, and an awkward situation due to that equity being illiquid as Stripe has not gone public.
mpweiher 4y ago
Stripe is not guaranteed by the taxpayer and not holding on to other people's (deposit) money. Banks are different. One of the greatest coups of lobbying was when the finance industry convinced politicians all over the world that banking ist just like any other industry and thus should not be regulated more than other industries.
- gbersac 4y ago
  Stripe do hold money on account of other people. When a customer pay, it does hold the money sent by the customer until your forward it to your account.
  - mpweiher 4y ago
    Are these deposits?
    - brianwawok 4y ago
      They aren't as far as I can tell. On one hand, it's safer they only hold money for a day or two. On the other hand, no FDIC insurance. If Stripe (or Visa or Mastercard) were to poof, what would actually happen to in-flight money? Seems like you could pretty easily lose a day or two where the client got charged, and it never got paid out.
      - KingMachiavelli 4y ago
        It's not Stripe or Visa "going poof" that would be an issue it would the underlying banks they use that add risk. Stripe/Visa are not FTX. Payment processors don't use in-flight transactions to pay liabilities (salaries, rent, etc.). They also don't (as far as I'm aware) convert that cash into other assets like bonds. However, the money may be stored in a money market account i.e short term bonds or even if it's a more normal savings account the bank itself depends on fractional lending and bonds. I'm be very surprised if any major payment processor hasn't vetted the institutions that hold transaction funds. That said some payroll companies were hit by SVB's collapse but more so on not being able to accept checks than loosing already received funds.
        kasey_junk 4y ago
        The payment processor I worked for ran routine capitalization audits on the partner banks they used.
      - 4y ago
plagiarist 4y ago
That's between them, their employees, and their investors. They aren't pilfering from taxpayers.
jatins 4y ago
> Stripe is raising $3.5 billion to help pay the tax (tax rate 22%?) on (some of) the bonuses of its employees from the last 13 years. Other than the word "raising" that statement is completely incorrect. > $3.5 billion Recent article mentioned this was north of 5B > tax rate 22% That's not accurate even for US and they have employees worldwide. > In no year has Stripe ever made a profit Source? > (some of) Almost all employees get stock based compensation at big tech companies > bonuses These are salaries or stock based comp, not bonuses > comparision in 2019 Stripe had 4,000 employees Source?
influx 4y ago
Is it worth showing profit on a C-corp?

zorked 4y ago

> In no year has Stripe ever made a profit. This doesn't mean that a bonus structure isn't appropriate. Bonus are supposed to be an incentive. Achieve bold goals -> get bonus. If anything this is more important in growing companies than in stable, profitable companies, which have achieved a sustaining business model. Why pay a bonus to people just following the algorithm. No judgement on Stripe's specifics.

deleted 4y ago
[deleted]

mirashii 4y ago

> on the bonuses of its employees from the last 13 years. It feels like this is misrepresenting the situation quite a bit. This is not a tax bill on bonuses. This is a tax bill on equity, which is a part of the regular compensation package, and an awkward situation due to that equity being illiquid as Stripe has not gone public.

mpweiher 4y ago

Stripe is not guaranteed by the taxpayer and not holding on to other people's (deposit) money. Banks are different. One of the greatest coups of lobbying was when the finance industry convinced politicians all over the world that banking ist just like any other industry and thus should not be regulated more than other industries.

gbersac 4y ago
Stripe do hold money on account of other people. When a customer pay, it does hold the money sent by the customer until your forward it to your account.
- mpweiher 4y ago
  Are these deposits?
  - brianwawok 4y ago
    They aren't as far as I can tell. On one hand, it's safer they only hold money for a day or two. On the other hand, no FDIC insurance. If Stripe (or Visa or Mastercard) were to poof, what would actually happen to in-flight money? Seems like you could pretty easily lose a day or two where the client got charged, and it never got paid out.
    - KingMachiavelli 4y ago
      It's not Stripe or Visa "going poof" that would be an issue it would the underlying banks they use that add risk. Stripe/Visa are not FTX. Payment processors don't use in-flight transactions to pay liabilities (salaries, rent, etc.). They also don't (as far as I'm aware) convert that cash into other assets like bonds. However, the money may be stored in a money market account i.e short term bonds or even if it's a more normal savings account the bank itself depends on fractional lending and bonds. I'm be very surprised if any major payment processor hasn't vetted the institutions that hold transaction funds. That said some payroll companies were hit by SVB's collapse but more so on not being able to accept checks than loosing already received funds.
      - kasey_junk 4y ago
        The payment processor I worked for ran routine capitalization audits on the partner banks they used.
    - 4y ago

plagiarist 4y ago

That's between them, their employees, and their investors. They aren't pilfering from taxpayers.

jatins 4y ago

> Stripe is raising $3.5 billion to help pay the tax (tax rate 22%?) on (some of) the bonuses of its employees from the last 13 years. Other than the word "raising" that statement is completely incorrect. > $3.5 billion Recent article mentioned this was north of 5B > tax rate 22% That's not accurate even for US and they have employees worldwide. > In no year has Stripe ever made a profit Source? > (some of) Almost all employees get stock based compensation at big tech companies > bonuses These are salaries or stock based comp, not bonuses > comparision in 2019 Stripe had 4,000 employees Source?

influx 4y ago

Is it worth showing profit on a C-corp?