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> Lütke holds seven per cent of Shopify, according to Forbes, and controls nearly a third of the votes attached to the company’s current shares. Since March 1,

> Lütke holds seven per cent of Shopify, according to Forbes, and controls nearly a third of the votes attached to the company’s current shares. Since March 1, 2020, his base salary has been the figure he requested: $1, down from his previous $800,000. [1] [1] https://financialpost.com/personal-finance/high-net-worth/whos-tobi-lutke-meet-the-tech-tycoon-who-draws-1-in-salary-and-runs-canadas-largest-listed-company https://financialpost.com/personal-finance/high-net-worth/wh...

roryirvine 2mo ago
So, just so that I'm clear, that means that Lütke himself pays no income tax? (assuming that he's not paid a salary by anyone else)
- mikestew 2mo ago
  No income tax, but capital gains tax. And capital gains tax is a lot less than income tax (hence Buffet’s “my secretary pays more tax than I do”). So the “$1/year” CEOs are simply reducing tax burden. But, yes, under the proposed scheme, Lütke doesn’t get to vote. One may rest assured that this was a simple mistake. In fact, I’m sure he meant that only those pay capital gains tax get to vote, not income tax.
  - bryanlarsen 2mo ago
    No capital gains tax is due until gains are realized. Lütke's gains are almost completely unrealized.
    - cayleyh 2mo ago
      Better yet, he gets loans, collateralized against those unrealized gains to the current value of the gains, and then writes off the loan interest against his present and future taxes! Amazing!
      - bryanlarsen 2mo ago
        Probably not. That strategy is a US strategy that takes advantage of holding the loans until death, then using the step up basis to zero out the unrealized gains and then pay off the loans. Canada doesn't have that. At death, assets are deemed disposed, so trigger unrealized gains as taxable income on the last tax return. It often results in the estates of upper middle class people paying a lot of taxes. But not the truly rich like Tobi who have good accountants and lawyers. He'll have moved his stock into a trust that doesn't dissolve on death.

roryirvine 2mo ago

So, just so that I'm clear, that means that Lütke himself pays no income tax? (assuming that he's not paid a salary by anyone else)

mikestew 2mo ago
No income tax, but capital gains tax. And capital gains tax is a lot less than income tax (hence Buffet’s “my secretary pays more tax than I do”). So the “$1/year” CEOs are simply reducing tax burden. But, yes, under the proposed scheme, Lütke doesn’t get to vote. One may rest assured that this was a simple mistake. In fact, I’m sure he meant that only those pay capital gains tax get to vote, not income tax.
- bryanlarsen 2mo ago
  No capital gains tax is due until gains are realized. Lütke's gains are almost completely unrealized.
  - cayleyh 2mo ago
    Better yet, he gets loans, collateralized against those unrealized gains to the current value of the gains, and then writes off the loan interest against his present and future taxes! Amazing!
    - bryanlarsen 2mo ago
      Probably not. That strategy is a US strategy that takes advantage of holding the loans until death, then using the step up basis to zero out the unrealized gains and then pay off the loans. Canada doesn't have that. At death, assets are deemed disposed, so trigger unrealized gains as taxable income on the last tax return. It often results in the estates of upper middle class people paying a lot of taxes. But not the truly rich like Tobi who have good accountants and lawyers. He'll have moved his stock into a trust that doesn't dissolve on death.