2 ms·

For most employees that would be worse. Dividends are taxed (15-20%) by the recipient after at the corporate level (35%). Also the small problem of what happens

• brownbat 13y ago
  > What happens when the company doesn't make money I'm not talking about company stock, I'm talking about stock in a sort of artificial vehicle used to compensate employees. I see your point, though, salaries/wages are tax deductible, so it's hard for companies to use other things besides salaries/wages. But... > If you transfer property (including your company's stock) to an employee as payment for services, you can generally deduct it as wages. http://www.irs.gov/publications/p535/ch02.html http://www.irs.gov/publications/p535/ch02.html But then if it's a transfer of property, you can't turn it into a long term capital gain, unless maybe you rented it to them? Hmm... probably wouldn't work. Turns out tax law is complex and not quite as easy to game as I thought.