Persimmon Homes -- CEO £100m Bonus...
Discussion
TooMany2cvs said:
Eric Mc said:
If the company had not paid the bonuses, the company's profit would be higher so their Corporation Tax bill would have been higher. I expect that the overall tax being paid by the company to HMRC will not go up or down because of the bonus.
Corp tax is a much lower rate than he's paying in income tax - 45% income tax versus 21% corp tax.If bonuses are paid in the form of share options or pension contributions, there may be no tax arising at all (initially). Tax will eventually be paid at a later date but the type and rate of tax may be very low depending on the manner in which the bonus is eventually crystalised.
CT is 20% and falling.
hyphen said:
The bigger picture is a total of £600million being handed out to 150 employees, with £100million of that being taken by the CEO.
And it isn't about CEO pay- shareholders have made money and would have been happy for him to be rewarded.
It was that this was cozy club approved a potentially unlimited payout, and then got caught out as they didn't expect such massive government subsidies (50% of sales were due to Help2Buy).
By making the top 150 execs rich, it means these employees can pretty much quit working now. There should have been a cap to account for the unexpected, basic common sense.
When it became apparent what was going to happen, the chairman refused to act retrospectively.
f
kwit chairman was forced out this week (won't care, also works for Rothschild) along with the fkwit 'independent' director who was chairman of the remuneration committee. Rest of the renumeration committee, CEO and others involved should all go.
Sorry about my lame attempt at sarcasm , powerstroke said:
Good for him successful company building houses for people who think they're successful, oh and think how many people working there have good well paid jobs... win win !!!
You don't get it, they have let down the shareholders...And it isn't about CEO pay- shareholders have made money and would have been happy for him to be rewarded.
It was that this was cozy club approved a potentially unlimited payout, and then got caught out as they didn't expect such massive government subsidies (50% of sales were due to Help2Buy).
By making the top 150 execs rich, it means these employees can pretty much quit working now. There should have been a cap to account for the unexpected, basic common sense.
When it became apparent what was going to happen, the chairman refused to act retrospectively.
f
kwit chairman was forced out this week (won't care, also works for Rothschild) along with the fkwit 'independent' director who was chairman of the remuneration committee. Rest of the renumeration committee, CEO and others involved should all go.Persimmons said:
Persimmon said Wrigley and Davie recognise the plan “could have included a cap”. It added: “In recognition of this omission, they have tendered their resignations.”
Edited by hyphen on Saturday 16th December 00:27
I wonder who these CEO troughers are ?? seems most are just arse lickers who have found a way up the greasy pole , few seem to be wealth creating entrepreneurs as such ???
BlackLabel said:
It seems perverse that a company which profits on the back of huge taxpayer subsidies can then go and pay their staff such bonuses.
This. 
From the reading I've done, the perverse bonus scheme was agreed a few years' ago and the people involved have since gone on to meet the requirements of said scheme. In that, the CEO and others who stand to benefit haven't done anything wrong however it is morally questionable.
MrBarry123 said:
This.
From the reading I've done, the perverse bonus scheme was agreed a few years' ago and the people involved have since gone on to meet the requirements of said scheme. In that, the CEO and others who stand to benefit haven't done anything wrong however it is morally questionable.
Knowing how profit figures and other Key Performance Indicators (KPI) used to determine bonuses can be manipulated, I often wonder if and when these house of cards eventually collapse.From the reading I've done, the perverse bonus scheme was agreed a few years' ago and the people involved have since gone on to meet the requirements of said scheme. In that, the CEO and others who stand to benefit haven't done anything wrong however it is morally questionable.
Enron was paying fantastic bonuses right up to the moment it all fell apart. Indeed, it was the great bonuses that led to KPIs being manipulated to ensure the bonuses remained great.
There were recent scandals at Tescos and Wickes where data was being manipulated to ensure good bonuses.
Eric Mc said:
I doubt very much they are paying full Income Tax or NI on these bonuses.
If bonuses are paid in the form of share options or pension contributions, there may be no tax arising at all (initially). Tax will eventually be paid at a later date but the type and rate of tax may be very low depending on the manner in which the bonus is eventually crystalised.
Please can you explain how these bonuses can be paid in the form of pension contributions? For the CEO (and other high earners), the maximum pension contribution will be £10k (to obtain tax relief) would it not?If bonuses are paid in the form of share options or pension contributions, there may be no tax arising at all (initially). Tax will eventually be paid at a later date but the type and rate of tax may be very low depending on the manner in which the bonus is eventually crystalised.
If the share options have value, particularly intrinsic value, surely that is subject to tax?
MrBarry123 said:
BlackLabel said:
It seems perverse that a company which profits on the back of huge taxpayer subsidies can then go and pay their staff such bonuses.
This. From the reading I've done, the perverse bonus scheme was agreed a few years' ago and the people involved have since gone on to meet the requirements of said scheme. In that, the CEO and others who stand to benefit haven't done anything wrong however it is morally questionable.
sidicks said:
Eric Mc said:
I doubt very much they are paying full Income Tax or NI on these bonuses.
If bonuses are paid in the form of share options or pension contributions, there may be no tax arising at all (initially). Tax will eventually be paid at a later date but the type and rate of tax may be very low depending on the manner in which the bonus is eventually crystalised.
Please can you explain how these bonuses can be paid in the form of pension contributions? For the CEO (and other high earners), the maximum pension contribution will be £10k (to obtain tax relief) would it not?If bonuses are paid in the form of share options or pension contributions, there may be no tax arising at all (initially). Tax will eventually be paid at a later date but the type and rate of tax may be very low depending on the manner in which the bonus is eventually crystalised.
If the share options have value, particularly intrinsic value, surely that is subject to tax?
leef44 said:
But when you get paid £100M, it is easy to spend say £1M for tax accountant/lawyer team to set up a tax haven which allows you to squirrel away your money away from HMRC's reach.
You can do what you like with it, wherever you like once it's been paid - but if it's paid in the UK, it's taxed in the UK.leef44 said:
Yes you are right that the pension portion of this will be a small %. But when you get paid £100M, it is easy to spend say £1M for tax accountant/lawyer team to set up a tax haven which allows you to squirrel away your money away from HMRC's reach. Although unethical, it is still legal. And yes the law is changing to make this harder. It may be so hard that in the past, the CEO would have only had to pay £0.5M to get the same result but now he has to pay £1M. The point being, with this amount of money, you can employ very clever people to find the tax loopholes.
Please explain what 'tax loopholes' are available to 'squirrel away' £100m from HMRC when this payment is publicly available information!!
leef44 said:
sidicks said:
Eric Mc said:
I doubt very much they are paying full Income Tax or NI on these bonuses.
If bonuses are paid in the form of share options or pension contributions, there may be no tax arising at all (initially). Tax will eventually be paid at a later date but the type and rate of tax may be very low depending on the manner in which the bonus is eventually crystalised.
Please can you explain how these bonuses can be paid in the form of pension contributions? For the CEO (and other high earners), the maximum pension contribution will be £10k (to obtain tax relief) would it not?If bonuses are paid in the form of share options or pension contributions, there may be no tax arising at all (initially). Tax will eventually be paid at a later date but the type and rate of tax may be very low depending on the manner in which the bonus is eventually crystalised.
If the share options have value, particularly intrinsic value, surely that is subject to tax?
crankedup said:
Let’s all be grateful and kneel at the alter of Capitalism out of control,imo.
You do realise that corporate remuneration isn't actually in the control of the people who get it? It's set by the remuneration committee, all of whose members are non-execs. I presume you know what a non-exec is? Even then, their recommendations have to be accepted by the shareholders at the AGM.https://www.persimmonhomes.com/corporate/investors...
https://www.persimmonhomes.com/corporate/media/314...
sidicks said:
leef44 said:
Yes you are right that the pension portion of this will be a small %. But when you get paid £100M, it is easy to spend say £1M for tax accountant/lawyer team to set up a tax haven which allows you to squirrel away your money away from HMRC's reach. Although unethical, it is still legal. And yes the law is changing to make this harder. It may be so hard that in the past, the CEO would have only had to pay £0.5M to get the same result but now he has to pay £1M. The point being, with this amount of money, you can employ very clever people to find the tax loopholes.
Please explain what 'tax loopholes' are available to 'squirrel away' £100m from HMRC when this payment is publicly available information!!
Maybe he will relocate to a tax haven, set his office up there, come to UK less than 90 days a year and not be a UK tax resident by the time his gains are crystallised which are paid directly to his office overseas...I don't know exactly but all I know is that there are ways when you throw enough money at it.
sidicks said:
Please explain what 'tax loopholes' are available to 'squirrel away' £100m from HMRC when this payment is publicly available information!!
Everyone from Bernie Ecclestone to Philip Green have had publicly known fortunes that have been structured in legal tax avoidance / mitigation schemes. It is fairly standard advice to defer money into a CGT gain then move into a low/no tax locale before liquidating it.
Did you miss the Panama papers et al? It's not exactly news that KPMG et al have structured countless tax avoidance/mitigation schemes that enable the wealthy elect to pay tax or not.
But in a simple scheme:
Company gives me a contractual right to buy shares at 500p that are currently worth 1000p in 2021. Since it is only an option to purchase I don't pay any tax as no money has changed hands. I leave the company and move to Monaco where I pay 0 percent CGT and am no longer a UK taxpayer. I exercise the option and buy 100m in shares for 50m, immediately sell them and make 50m in capital gain. The transaction occurs when I'm resident in Monaco I've gained 50m tax free. The HMRC can make no claim as it wasn't paye income - i bought the shares albeit at a preferential rate before selling them. There may be tax obligations to close this loophole where the options margin is taxable on issue (as in the US) however there are various schemes like restricted stock units, convertible class shares that can avoid this, as well as more complicated arrangements using offshore trusts etc - if you'd like a current worked example based on the current rules go and ask a tax advisor.
it's not like they just chuck 100m into his monthly pay, the whole scheme will be designed to be as tax beneficial as possible for both the company and individual beneficiaries.
leef44 said:
Google is an example. Very publically known. Do you see them paying 21% corporation tax. Lord Ashworth, publically known but is not UK tax resident. It doesn't make a difference that it is publically known. It matters how the money is transacted, what tax vehicle is used to pay it. However, I am not one of those millionaire tax accountant/lawyers so I do not know what tax vehicle they will come up with.
So you are now confusing PAYE and company taxation?leef44 said:
Maybe he will relocate to a tax haven, set his office up there, come to UK less than 90 days a year and not be a UK tax resident by the time his gains are crystallised which are paid directly to his office overseas...I don't know exactly but all I know is that there are ways when you throw enough money at it.
It seems what you know and what you think you know are miles apart!
nyxster said:
What's with the constant 'please explain' requests fella? Are you incapable of using google? Eric has already pointed out to you that by moving it into a CGT scheme tax isn't payable until the gain is crystalised, regardless of the ampunt being public or private if the beneficiary isn't a UK tax resident when the gain is crystalised then even if the gain is derived in the UK through the use of dual-taxation agreements and residency in a low/no CGT tax jurasdiction like Monaco or certain Swiss cantons tax can be deferred and then legally avoided.
The shares could also be paid into an offshore trust as Bernie Ecclestone did which would shelter it from tax and then 'lent' to a beneficiary in the form of loans.
Everyone from Bernie Ecclestone to Philip Green have had publicly known fortunes that have been structured in legal tax avoidance / mitigation schemes. It is fairly standard advice to defer money into a CGT gain then move into a low/no tax locale before liquidating it.
Did you miss the Panama papers et al? It's not exactly news that KPMG et al have structured countless tax avoidance/mitigation schemes that enable the wealthy elect to pay tax or not.
But in a simple scheme:
Company gives me a contractual right to buy shares at 500p that are currently worth 1000p in 2021. Since it is only an option to purchase I don't pay any tax as no money has changed hands. I leave the company and move to Monaco where I pay 0 percent CGT and am no longer a UK taxpayer. I exercise the option and buy 100m in shares for 50m, immediately sell them and make 50m in capital gain. The transaction occurs when I'm resident in Monaco I've gained 50m tax free. The HMRC can make no claim as it wasn't paye income - i bought the shares albeit at a preferential rate before selling them. There may be tax obligations to close this loophole where the options margin is taxable on issue (as in the US) however there are various schemes like restricted stock units, convertible class shares that can avoid this, as well as more complicated arrangements using offshore trusts etc - if you'd like a current worked example based on the current rules go and ask a tax advisor.
it's not like they just chuck 100m into his monthly pay, the whole scheme will be designed to be as tax beneficial as possible for both the company and individual beneficiaries.
So there is no tax due on the value of those options granted? That's certainly not my experience.The shares could also be paid into an offshore trust as Bernie Ecclestone did which would shelter it from tax and then 'lent' to a beneficiary in the form of loans.
Everyone from Bernie Ecclestone to Philip Green have had publicly known fortunes that have been structured in legal tax avoidance / mitigation schemes. It is fairly standard advice to defer money into a CGT gain then move into a low/no tax locale before liquidating it.
Did you miss the Panama papers et al? It's not exactly news that KPMG et al have structured countless tax avoidance/mitigation schemes that enable the wealthy elect to pay tax or not.
But in a simple scheme:
Company gives me a contractual right to buy shares at 500p that are currently worth 1000p in 2021. Since it is only an option to purchase I don't pay any tax as no money has changed hands. I leave the company and move to Monaco where I pay 0 percent CGT and am no longer a UK taxpayer. I exercise the option and buy 100m in shares for 50m, immediately sell them and make 50m in capital gain. The transaction occurs when I'm resident in Monaco I've gained 50m tax free. The HMRC can make no claim as it wasn't paye income - i bought the shares albeit at a preferential rate before selling them. There may be tax obligations to close this loophole where the options margin is taxable on issue (as in the US) however there are various schemes like restricted stock units, convertible class shares that can avoid this, as well as more complicated arrangements using offshore trusts etc - if you'd like a current worked example based on the current rules go and ask a tax advisor.
it's not like they just chuck 100m into his monthly pay, the whole scheme will be designed to be as tax beneficial as possible for both the company and individual beneficiaries.
TooMany2cvs said:
crankedup said:
Let’s all be grateful and kneel at the alter of Capitalism out of control,imo.
You do realise that corporate remuneration isn't actually in the control of the people who get it? It's set by the remuneration committee, all of whose members are non-execs. I presume you know what a non-exec is? Even then, their recommendations have to be accepted by the shareholders at the AGM.https://www.persimmonhomes.com/corporate/investors...
https://www.persimmonhomes.com/corporate/media/314...
Thanks for the links.
Edited by crankedup on Saturday 16th December 14:24
Edited by crankedup on Saturday 16th December 14:33
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