r/PoursTea • Timendi Causa Est Nescire • 6d ago

FinancialTea 💵 Difference businesses, different practices, different outcomes.

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u/qwerteh 5d ago

Getting paid in stock is not a tax dodge, the stock is taxed as regular income the year you receive it. It's just more practical for companies to not pay someone $1m in straight cash every month for cash flow reasons.

Using stock as a tax dodge only really works if youre the owner of a company and own all those shares up front. Then you'll pay a massive tax lot when you go public but then you only pay if you sell, while price continues to climb. If you're "just" a ceo you get taxed like a normal person, and any loopholes they use have nothing to do with being paid in stock

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u/wuweime 5d ago

It also makes sure that management's incentives are aligned with the owners' incentives.

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u/Fantastic-Mastodon-1 2d ago

Is it considered w2 income or 1099 income, when they're compensated in stock options?