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When public companies get fined, those fines should come 100% out of profits, not revenue. That might help resolve this kind of conflict of interest.
by sbarre 3y ago
When public companies get fined, those fines should come 100% out of profits, not revenue.
That might help resolve this kind of conflict of interest.
- dumpsterlid 3y ago[dead]
- dvnguyen 3y agoHow do you fine profits?
- Mountain_Skies 3y agoExtra percentage points on their tax rate? The question is if they could use more aggressive tax avoidance schemes to counteract this?
- tracerbulletx 3y agoWhat? Fines are expenses, they do "come out of profits" to whatever extent that has meaning. They also aren't deductible expenses for taxable income if that's what you're talking about.
- sbarre 3y agoSure my comment was probably over-simplified, but I was imagining fines as coming out exclusively of whatever slice of money goes to the beneficiaries of public companies, vs. something that comes out of a bank account or operating expenses. So any money that _would_ have been paid out to shareholders (bonuses, dividends, buybacks) is what goes to pay the fine, until it is paid. This would dis-incentivize decisions that benefit shareholders at the risk of breaking rules. We all hear about fines being "one day of operating expenses" and so on.. So who cares about getting fined then. In retrospect I'm sure this isn't that realistic as companies would just do accounting gymnastics to get around this, as many do for other accounting rules. And it would probably impose an undue burden on auditing to make sure money is put in the right buckets etc...
- Ekaros 3y agoThey should actually directly hit the stock price. Set the fine per stock unit.
- deleted 3y ago[deleted]