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New York Times: CEO gets 36% raise, employees get 3% (union.place)

submitted 2 months ago by [email protected] to c/[email protected]

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[–] [email protected] 2 points 2 months ago (1 children)

Stock

at least, RSUs

is AFAIK taxed like supplemental income ( https://www.harnesswealth.com/articles/what-you-need-to-know-about-restricted-stock-units-rsus/ ), which is very similar to regular income. Stock options are different though, and maybe this is what you're referring to

I think (???) options can be beneficial to the recipient from a tax perspective vs. other compensation but not an expert...

And then there are capital gains, which is a different, but related, story...

[–] [email protected] 2 points 2 months ago* (last edited 2 months ago)

Huh, I thought there was something like RSUs that were delayed compensation, but that's apparently wrong. Looking into it, it looks like they don't really avoid taxation on the actual compensation (either they're taxed on vesting for RSUs, or taxed on the option spread), and one of the main benefits is delayed taxation/rolling options if the value drops.

So the main loophole seems to be inheritance taxes, which is unrelated to compensation, but does fuel the trend of borrowing instead of selling assets. If the estate was taxed for all unrealized capital gains before inheritance, I think we'd see a lot higher income tax bills from execs because it would essentially eliminate the "borrow/buy/die" loophole. We could take it one step further and require immediate taxation anytime stock changes hands (so even charitable giving would trigger capital gains tax).