When are discretionary bonus plans attractive tax-planning vehicles? What incentives might induce the employer to renege on the bonus? What prevents the employer from reneging?
Answer to relevant QuestionsIs each statement true or false? a. The expected return on stock appreciation rights always exceeds the expected return on the underlying stock. b. The financial reporting differences for compensating employees with stock ...Under current law, employer-paid health insurance premiums are deductible by the employer and not taxable to the employee. Suppose instead only the first $1,000 of such premiums were nontaxable. If an employee was in the 15% ...It is late 2013 and you are a successful oil executive currently working in Alaska for a major oil company. Tomorrow morning you will have the opportunity to negotiate with your employer to receive some amount of deferred ...Three purported tax advantages of an ESOP are that the corporation can make tax-deductible contributions to fund the ESOP or pay down the principal on an ESOP loan, that qualified lenders can exclude from taxation 50% of the ...Suppose a firm faces a current tax rate of 35% but expects this rate to fall to 20% in the future. Employees on average face a current marginal tax rate of 31% but expect this rate to fall to 20% when they retire in 15 ...
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