The most prestigious law school admissions discussion board in the world.
|
 |
 
|
Most of the Amazon's massive write-off came from high-level executives cashing i
Poast new message in this thread
Date: April 8th, 2018 10:22 AM Author: thriller menage According to Gardner’s analysis of Amazon’s 10-K filing, most of the company’s massive write-off—nearly $1 billion—came from high-level executives cashing in stock options. That’s right: When employees sell their stock, employers get to claim the entire value of that deduction. Say the company gave a VP $1 million in stock in 2008, when it was valued at around $70 a share. Those stocks would be worth more than $20 million if cashed out now—and Amazon could take the whole thing as a write-off. According its 10-K filing, Amazon’s execs cashed out nearly $1 billion in stock options last year, negating most of the year’s federal tax bill.
https://newfoodeconomy.org/amazon-whole-foods-a-whole-federal-tax-doorbell-ring/ |
Date: April 8th, 2018 10:23 AM Author: titillating blue famous landscape painting box office Said it before and I'll say it again... (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35790841) |
 |
Date: April 8th, 2018 12:09 PM Author: dull filthpig (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35791400) |
|
Date: April 8th, 2018 10:24 AM Author: burgundy locus Why does this seem egregious to you? The relevant principle here is you pay tax on profits, not just revenues. I assume this seems fair to you.
How do you calculate the value of compensation paid on employee stock options? Is it (a) the value of the options upon issuance (using black-scholes, so based on stock price volatility, prevailing interest rates, etc) or (b) the value of the underlying shares whenever employees actually exercise the options? GAAP says (a) but the IRS says (b).
The “write off” here (write off is the wrong term) is from Amazon’s stock skyrocketing during the period after the options were issued and when the employees exercised them. Basically they took a deduction for accounting taxes (but not cash taxes) upon issuing the options and then adjusted for actual cash tax savings upon issuing the shares.
The value being transferred from shareholders to employees is obviously higher when the stock price is higher - why shouldn’t the shareholders benefit from a proportionate deduction on compensation expense?? |
|
Date: April 8th, 2018 10:36 AM Author: burgundy locus Hold up lemme save you the time:
((( )))
|
|
Date: April 8th, 2018 12:11 PM Author: racy gunner immigrant (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35791414) |
|
Date: April 8th, 2018 11:02 PM Author: multi-colored demanding patrolman home (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35795855) |
|
Date: May 21st, 2018 5:55 PM Author: hairraiser partner (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#36099319) |
|
Date: May 21st, 2018 6:04 PM Author: Soul-stirring Sinister Turdskin (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#36099375) |
|
Date: April 8th, 2018 12:06 PM Author: thriller menage I assumed a lawmo would have some insight here. What would the effect be if companies could only write off the value upon issuance and not adjust for the exercised value? (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35791375) |
|
Date: April 8th, 2018 1:09 PM Author: burgundy locus hard to say. youre not alone in having the thought process that led to this question tho: it seems unfair to let companies pay employees compensation worth X but then deduct a number >>> X when they actually issue the stock.
then again im sure there are a bunch of employees at GE with $60 strike price options that'll happily confirm that you don't always get to exercise employee stock options. |
|
Date: May 21st, 2018 5:54 PM Author: splenetic vengeful ladyboy sound barrier disincentive to use stock options which obviously are an effective tool in encouraging management to maximize shareholder value in the long term
|
|
Date: April 8th, 2018 12:09 PM Author: titillating blue famous landscape painting box office It seems like the incentive is to run a non-profitable revenue growth company and to use your stock as currency, where the stock is valued off of growth in revenue and not profits (net income). Given a long enough time scale this creates extreme distortions
Having stock be used as currency to pay for acquisitions, pay employees and to raise capital to continue profit-less revenue growth distorts markets and value.
The extreme example of this is what AOL did with Time-Warner - used their ridiculously overvalued stock as currency to acquire an actually profitable company and look what happened.
|
|
Date: April 8th, 2018 12:11 PM Author: racy gunner immigrant (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35791417) |
|
Date: April 8th, 2018 1:13 PM Author: burgundy locus well stocks (and bonds and every other asset) are ultimately only valued based on cash flow. you can't eat net income.
early stage tech and pharma companies are valued based on revenue (or other metrics like page views), but only as a proxy for future cash flow. you can't actually not generate cash flow into perpetuity (ask elon musk).
amazon is a special case because people saw its immense potential relatively quickly - 99.999% of companies couldn't recreate their approach to stock based comp and stuff |
|
Date: April 8th, 2018 1:20 PM Author: Indigo Becky Casino ur just regurgitating stuff you read in a textbook. (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35791787) |
|
Date: April 8th, 2018 1:30 PM Author: burgundy locus ok
this board has waaaaay too many retarded people to be so obsessed with iq lmao |
|
Date: April 8th, 2018 2:19 PM Author: thriller menage The IQ obsession indicates that there are lots of retarded people on here (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35792177) |
|
Date: April 8th, 2018 2:26 PM Author: burgundy locus agreed (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35792228) |
|
Date: April 8th, 2018 10:25 AM Author: pearly resort https://m.youtube.com/watch?v=rCZRqH7sRyA (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35790848) |
|
Date: April 8th, 2018 12:07 PM Author: Electric Hall Donald Trump said he's "smart" by not paying income taxes — and argued that if he did, the money would be "squandered."
Trump's jaw-dropping statements came after Hillary Clinton launched a fiery attack on the Republican presidential nominee for breaking a four-decade tradition of White House aspirants releasing their federal income tax returns.
"The only years that anybody's ever seen were a couple of years when he had to turn them over to state authorities when he was trying to get a casino license, and they showed he didn't pay any federal income tax," Clinton said.
Trump quickly retorted: "That makes me smart." |
|
Date: April 8th, 2018 12:11 PM Author: Pea-brained cobalt lay lmao nobody is arguing that it isn't smart to offset against taxable income. (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35791418) |
|
Date: April 8th, 2018 9:37 PM Author: thriller menage (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35795155) |
|
Date: April 8th, 2018 11:04 PM Author: insanely creepy crimson persian lmao there's always some pissy amazon employee in these threads (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35795879) |
|
Date: April 8th, 2018 11:32 PM Author: burgundy locus everyone hostile to “i’m mad as fuck at the world but i’m too dumb to know why” is an amazon employee? (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35796137) |
|
Date: April 9th, 2018 12:45 AM Author: burgundy locus (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#35796542) |
|
Date: May 21st, 2018 5:57 PM Author: cruel-hearted irradiated personal credit line school isn't this an INCREASE in taxes collected by the govt? employees must include an equal amount of income from NQSOs as the comp deduction taken by the company, and these guys are in the highest federal bracket which is higher than the new corp tax rate. (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#36099333) |
|
Date: May 21st, 2018 6:04 PM Author: Avocado heady haunted graveyard stain no, because they just write it off (http://www.autoadmit.com/thread.php?thread_id=3942652&forum_id=2#36099371) |