(Total Views: 787)
Posted On: 05/08/2017 7:35:32 AM
Post# of 75364
Why pay management in stock instead of cash? WELL, there must be a method to their madness. THERE IS!
With the goal to grow a company you need to go to meetings and travel to gather partners, distributors, and manufacture products. That's why they use the cash available for expenses to make the company grow. To hire the best possible management and to keep them they have to be paid, What better way then to pay them and restrict the stock. If they can grow the company they increase the value of the stock and in the long run they will make much more then cash and they get a tax break to boot. The stock will be taxed at a capital gains rate rather then normal income rate. Its a win/win for the share holders and the company
With the goal to grow a company you need to go to meetings and travel to gather partners, distributors, and manufacture products. That's why they use the cash available for expenses to make the company grow. To hire the best possible management and to keep them they have to be paid, What better way then to pay them and restrict the stock. If they can grow the company they increase the value of the stock and in the long run they will make much more then cash and they get a tax break to boot. The stock will be taxed at a capital gains rate rather then normal income rate. Its a win/win for the share holders and the company
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