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To: RetiredNow who wrote (64661)	9/17/2003 8:11:44 AM
From: Amy J	Respond to of 77400

Hi Thread, And dividends are so much better (sarcasm intended) than options... ...for CEOs to avoid taxes: From MS-Slate: "By increasing Citigroup's dividend, as he did last week, outgoing CEO Sandy Weill just granted himself an annual stream of income of $32 million that will be taxed at 15 percent. Under the old regime, had he chosen to take that sum via options or a bonus, he would have paid more than twice as much in taxes." Due to the recent tax law changes we essentially have: Dividends for (non-hightech) CEOs, options for the working class, and shares for founders. Mainstream media is (for the most part) essentially unaware of the preferential tax treatment of these items. Hint: employees with options pay more in taxes (as measured by percent) than non-hightech CEOs with dividends. ( NQ Options get taxed at a higher personal tax rate than dividends and founders shares. Non-qual options are taxed at the income rate, Founders shares are treated more advantageously thru section 83b, and you know the story on dividends that now have a tax advantage ) Courtesy of the new tax law changes that distributes wealth to smoke-stack CEOs (or, non-hightech dividend-holding CEOs) thru lower tax rates, the high-tech Employee pays a higher tax rate for their options than the smoke-stack CEO. Of course, the average employee doesn't know this, yet. Fortunately, this discrepancy - that the (non-hightech, dividend-holding) CEO pays less tax than employees - is a platform pitch one of the Presidential candidates appears to be using, with the goal to fix this inequity. Bush's tax laws show preferential treatment to CEOs of mature, or low-growth, or smoke-stack companies, that are dividend holders. Citi's CEO also has founders shares (since he was a founder) which means he had the sufficient funds to pay his tax bill, so there was no need to cut his tax bill in half, while sticking it to high-tech employees with his promotion of the new tax law. From CNN: "Citigroup Inc., the world's largest financial services company, said Tuesday that Sanford Weill will step down as chief executive effective Oct. 1 Weill's stake in Citigroup totaled 22,399,475 shares as of July 1, a securities filing shows. That was worth just over $1 billion based on Citigroup's closing price Tuesday." money.cnn.com ------------ To quote one Silicon Valley Republican investor, "Bush screwed us." I like the post that essentially said, I'd rather have my money invested in a company where ceos & employees have the incentive to work to increase the stock beyond grant price to create value, rather than giving them dividends which provide zero incentive to grow the company, or giving shares that give value to ceos even when the market value drops below 'grant price', when investors experience losses. Incongruent to investors. Regards, Amy J