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If there’s enough money to pay the founders salaries, but not so much for dividends, this doesn’t help. There are two direct ways to return money to the founde
by slashdev 2y ago
If there’s enough money to pay the founders salaries, but not so much for dividends, this doesn’t help.
There are two direct ways to return money to the founders - salaries and dividends. In the U.S. there is a tax advantage to dividends, over an amount anyway. This is not true of all countries.
- persnicker 2y agoNeat edge case! Perhaps SAFE notes or other dividend-paying instruments should account for this by capping executive salaries or trigger dividend payouts at a certain salary dollar amount. Though, admittedly, I've never heard of a founder or executive using their salary instead of taking dividends as an end run around paying everyone their fair share of dividends. It seems possible though.
- alooPotato 2y agoThere already is a cap. Founders have a fiduciary duty to their shareholders and can't pay themselves unreasonably. Lots of gray area, but there is a limit.