"That would seem a bit odd to me."
Not if you understand corporate law.
The corporation is a separate entity, and individual animal that is different from its shareholders. The shareholder owns part of that separate entity, the corporation.
The only question here is, 'how much is the corportion worth?"
Let's say that your corpoation has 10 shares.
If your corporation made 12 dollars, had no other expenses, and gave your employees each one stock, it would still have and be worth 12 dollars.
Your stock, however, would be worth only 10 dollars and not twelve and there stock would be worth 1 dollar each. It does not matter whether they sell their stock or not.
If you paid them a dollar apiece instead of stock, your stock would STILL be worth 10 dollars. (12 less the 2 dollars you paid them)
Now, what Barrett is saying is that I can get an employee to work harder than a dollar's worth IF he or she feels part of the company, AND since there is tax advantage to the employee of say 30 cents, I can get and additional 30 cents worth of work in addition.
Compensation theory wise, the corp is now worth at least 12 plus the 60 cents (2x30) plus the amount by which the employee works harder which I am guessing is ~23.7 cents (which adds 47.4 cents to the corporate worth) |
