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View Diary: Who wouldn't want a $58 million severance package? (139 comments)

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  •  $58 million may sound like a lot to you, Jen... (15+ / 0-)

    but he'll probably have to pay like $25 million in taxes... $25 million more than those lucky duckies who make so little they don't have to pay any federal taxes.

    ;-)

    •  You are thinking of minmum wage workers. (11+ / 0-)

      You know the ones so poor that they don't even earn the minimum threshold for itemized deductions.

      This guy will pay 8% tops, if any at all on that payout

      •  No, he will pay 39.6% plus 13.3% in CA (11+ / 0-)

        plus Medicare tax on all of it. All top executive severance pay is W2 income, taxed at the top marginal rate for federal and state purposes. None of it can possibly qualify for capital gains treatment.

        "let's talk about that"

        by VClib on Thu Apr 17, 2014 at 08:17:50 AM PDT

        [ Parent ]

        •  Prove it (5+ / 0-)

          Post a link showing this guy actually paid their fair share.

          And I bet this grifter files auarterly so you only have to wait three months to do it.

          •  All tax information is confidential (7+ / 0-)

            Only the taxpayer, his accountants and the taxing authorities have access to the actual returns, or quarterly payments. However, the tax law on this type of compensation is very clear, it's W2 income.

            "let's talk about that"

            by VClib on Thu Apr 17, 2014 at 09:32:26 AM PDT

            [ Parent ]

            •  Then how do we know if he paid his share? (1+ / 0-)
              Recommended by:
              Constantly Amazed

              As you unsuportely assert?

              Please tell us all where you have access to the 1% returns to make a statement like he will pay his fair share?

              •  All I am stating is what the tax law is (7+ / 0-)

                and at that level of severance how it will be taxed. No one can see the actual returns.

                "let's talk about that"

                by VClib on Thu Apr 17, 2014 at 09:48:40 AM PDT

                [ Parent ]

                •  Reality has established (1+ / 0-)
                  Recommended by:
                  YouKnowMe

                  The fact that the 1% weasel out of paying their fair share.

                  You are unsupportedly trying to dispute that.

                  Prove to us this 1% is the exceptionm

                  •  Horace - lower tax rates can be achieved (5+ / 0-)

                    from various types of investment income and there are a very small number of professionals who manage investment partnerships like private equity, venture capital, and hedge funds who are able to structure their incentive income in a manner that allows it to be taxed at the long term capital gains rate. That structure is only available to entities who manage partnerships. It is not available to corporations or corporate executives. All senior executive compensation at the Fortune 1000, including all stock options and restricted stock, is reported as W2 income and taxed at the top marginal rate. The same is true for severance pay.

                    "let's talk about that"

                    by VClib on Thu Apr 17, 2014 at 02:28:26 PM PDT

                    [ Parent ]

                    •  Which means nothing (3+ / 0-)
                      Recommended by:
                      kerplunk, stringer bell, bepanda

                      Why would you type out a bunch of crap like that?

                      It means as much as this:

                      s;cnahva ae[odij as]p[a dsf
                      asp[kj]pjav m\
                      sAPVJPOFR=-R=]ASDV
                      VIOUH;PASHV;AW [DJKJXCKoijoajcioc
                      kvodviavd[' zSllcxvjoPS

                      Do you REALLY think anyone is going to buy that line of bullshit?

                      All senior executive compensation at the Fortune 1000, including all stock options and restricted stock, is reported as W2 income and taxed at the top marginal rate.
                      What a load.
                      •  The commenter is apparently not aware (4+ / 0-)
                        Recommended by:
                        Capt Crunch, stringer bell, YouKnowMe, hbk

                        We know the rich game the system.

                      •  This is black and white tax law (1+ / 0-)
                        Recommended by:
                        itsjim

                        Severance pay is W2 income.

                        "let's talk about that"

                        by VClib on Thu Apr 17, 2014 at 10:31:51 PM PDT

                        [ Parent ]

                      •  Seriously? (1+ / 0-)
                        Recommended by:
                        Sparhawk

                        VClib's explanation was pretty clear. If you can't comprehend it, then you probably shouldn't be weighing in on the subject, let alone be calling "bullshit." Just like Horace's comment above, where he declares that:

                         

                        This guy will pay 8% tops, if any at all on that payout.
                        We are given no indication that this number came from anywhere other than Horace's ass. Yet he challenged VClib to provide empirical data to back up his argument. When he tried to explain how executive compensation works, a subject he is obviously familiar with, he is told that his explanation is "bullshit."

                        How is this different from the person who, in spite of all evidence to the contrary, insists that Jesus rode a dinosaur?

                        So endith the trick.

                        by itsjim on Fri Apr 18, 2014 at 05:13:13 AM PDT

                        [ Parent ]

                        •  Answer: (0+ / 0-)

                          Mitt Romney
                          Warren Buffett

                          Get a clue.

                          •  I tremble in the face of... (0+ / 0-)

                            ...your searing intellect.

                            So endith the trick.

                            by itsjim on Fri Apr 18, 2014 at 09:29:57 AM PDT

                            [ Parent ]

                          •  You should - Pollyanna. (0+ / 0-)
                          •  Capt Crunch - your comment displays your lack (1+ / 0-)
                            Recommended by:
                            itsjim

                            of understanding of this issue. Mitt Romney, who ran Bain Capital is one of the exceptions I mentioned in my comment. Bain Capital is a private equity firm where the managers can structure their incentive compensation to qualify for long term capital gains treatment. That's called a "carried interest".

                            Warren Bufett is a somewhat unusually case. Buffet manages a Fortune 500 company where he personally has a large ownership of shares, not options or restricted stock earned as compensation, but outright ownership of shares he has purchased with his own cash. He also only receives an annual salary of $125,000, not the $5-10 million that other CEOs of similar sized companies earn. Bufett's income comes from selling shares he has owned for decades and therefore qualify for long term capital gains tax treatment. Because his salary is so modest, as a CEO, it doesn't really impact his effective tax rate.

                            Other founder/executives like the founders of Google, Facebook, Microsoft and others, also have founders' shares that they own and did not receive as compensation. When they sell those shares the gain is taxed at the long term capital gains rate, however any compensation they receive is taxed at earned income rates.

                            I really am an expert in this space. This is all black and white tax law. You could learn something.

                            "let's talk about that"

                            by VClib on Fri Apr 18, 2014 at 11:03:59 AM PDT

                            [ Parent ]

                          •  Oh give it a rest - expert (0+ / 0-)

                            You're an expert making excuses for the monied class.

                            That's what you do 90% of the time.

                            First of all the issue isn't even taxes - it's the inequality of the situation.

                            You understand that don't you? Are you enough of an expert to get that much?

                            Hey - maybe YOU should pay attention, stop apologizing for the wealthy, as you regularly do, and then YOU might learn something... oh forget it. You're hopeless.

                          •  Captain Crunch - I expressed no opinons in this (0+ / 0-)

                            entire thread. What I have tried to do is educate people on the tax law and how it applies to this particular situation of severance. I only did so when people, who know absolutely nothing about tax law or the taxation of executive compensation, started posting information that is not correct. People can have any opinion they wish about the outrageous nature and amount of the compensation. That's their opinion, however when they write about how it is taxed, that is a matter of fact, not opinion. Either we are a fact based site or we aren't. Erroneous "facts" should always be corrected with the truth.

                            "let's talk about that"

                            by VClib on Fri Apr 18, 2014 at 04:27:44 PM PDT

                            [ Parent ]

                          •  You missed the point again (0+ / 0-)

                            I didn't say your apologist rhetoric was part of this thread.

                            I said you do it 90% of the time. Read what I said.

                            As to you being an expert - sez who? YOU? That's meaningless.
                            We're just supposed to take your word? Or we're supposed to take time to look up arcane tax laws? That's missing the point too.

                            The fact is the wealthy DO get a bigger break on taxes than the average working shmoe. I've never once seen you leap to the defense of the average worker and how unfair their situation is.
                            I've never once seen you offer your "expert" opinion to point out that the average workers are getting screwed.
                            Your "expert" opinion is always presented to downplay raging inequality. Your aim is not to present "facts".  It's a rhetorical device to limit the perception of the game being rigged. Always.

                            Maybe you should learn to be a little more subtle in your fawning desire to mythologize the wealthy.

                          •  People who actually know the law (0+ / 0-)

                            comment frequently in the threads and in Kosmail about my expertise. If you know the subject matter it's clear by what I write that I know the law in this area.

                            I bring no particular insight or expertise to the issue of the average worker getting screwed and we certainly have thousands of people writing diaries on those topics. What we don't have is many people with the experience and expertise in the areas where I most often write. That gives me the opportunity to educate people who actually want to know facts and the law in areas of executive compensation, investments, and corporate governance. That's my contribution here. While I some times give opinions, most of my nearly 35,000 comments here are about facts, something we could use more of at DKOS.

                            "let's talk about that"

                            by VClib on Fri Apr 18, 2014 at 05:46:20 PM PDT

                            [ Parent ]

                          •  What a load (0+ / 0-)
                            People who actually know the law comment frequently in the threads and in Kosmail about my expertise.
                            Ha! Yeah - folks like Coffetalk and Pi Li. Folks that play the same rhetorical game as you. That's hilarious.

                            I stand by my point  90% of your comments are specifically designed to make the wealthy look good. Your comments have nothing to do with education - they're thinly veiled propaganda.

                            You don't bring facts to the table - you bring propaganda.

                            And that's something we could use less of here.

                          •  Capt Crunch - even in just this thread (0+ / 0-)

                            Heart of the Rockies, itsjim, and al23, all three with five digit UIDs, commented on my expertise and your lack of knowledge in this subject matter.

                            You are embarrassing yourself.

                            "let's talk about that"

                            by VClib on Fri Apr 18, 2014 at 07:37:37 PM PDT

                            [ Parent ]

                          •  You can't be this dense (0+ / 0-)

                            i mean really.

                            To miss the point i'm making over and over. To miss it so entirely you don't even address it?

                            WOW - that's dense.

                            I stand by my point  90% of your comments are specifically designed to make the wealthy look good. Your comments have nothing to do with education - they're thinly veiled propaganda.
                            Read. Comprehend. Think. Respond.

                            Is that really so hard to do?

                          •  Why do you refuse to be educated on the facts? (0+ / 0-)

                            "let's talk about that"

                            by VClib on Fri Apr 18, 2014 at 08:48:24 PM PDT

                            [ Parent ]

                          •  You refuse to live in the real world (0+ / 0-)

                            You refuse to acknowledge the entire point of my post

                            You just spew out a bunch of bull shit - with nothing to back it up - and want me to refer to it as facts?

                            You have got to be either kidding, lying or incredibly stupid.

              •  How do you know he didn't (0+ / 0-)

                You're the one claiming he's violating the law here (baselessly).

                (-5.50,-6.67): Left Libertarian
                Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                by Sparhawk on Thu Apr 17, 2014 at 07:00:25 PM PDT

                [ Parent ]

            •  that is sad. (0+ / 0-)

              really, there should be competition to pay the most taxes.  After all money is speech, so it would say who loves America most.  And what is the point of winning the competition and not inspiring others to do more.  Taxes and income should be public knowlege.

              •  The tax returns of individuals should NEVER (0+ / 0-)

                be pubic information. It is a felony for anyone, the IRS, other government employees, professional tax or accounting firms, or the public, to disclose the tax information of another person without their express written permission, and that's how it should always be.

                Money is speech only when you spend that money to communicate directly with voters, it's is certainly NOT speech to pay taxes.

                "let's talk about that"

                by VClib on Fri Apr 18, 2014 at 10:53:02 AM PDT

                [ Parent ]

        •  Let's say he reaped only 40% of that, (9+ / 0-)

          after taxes and Medicare, etc.... 40% of $58 million is $23.2 million. For severance after 15 months on a job. $23.2 million. Twenty-three million and two hundred thousand dollars free and clear. For what?!?

          curious portal - to a world of paintings, lyric-poems, art writing, and graphic and web design

          by asterkitty on Thu Apr 17, 2014 at 08:59:48 AM PDT

          [ Parent ]

        •  Marginal Rate Over $407.6K and $508.5K (4+ / 0-)
          Recommended by:
          stringer bell, llywrch, ChemBob, hbk

          Those rates you quote apply only to the marginal income over those federal and state thresholds.

          I'd gladly stand in line for the lower severance package of $407K after only 15 months on the job to avoid the maximum tax bracket.  Wouldn't you?

          I am also unbelievably unsympathetic for him having to pay 52.9% of the remaining $57.0 million.

          At this point, I just want America to admit that it still doesn't want its Black citizens to live in any state other than terror, subservience and inferiority, under pain of death. I can handle American racism, but I can't handle American denial.

          by shanikka on Thu Apr 17, 2014 at 07:11:04 PM PDT

          [ Parent ]

          •  shanikka - I wasn't commenting on the circumstance (1+ / 0-)
            Recommended by:
            Sparhawk

            only it's taxation. At nearly $60 million the threshold amounts are a rounding error.

            I understand why his severance is so high, Yahoo had to make him whole on his Google options to lure him to leave Google. Unfortunately, things didn't work out at Yahoo, but he had a contract with stated severance. I don't feel sorry for him, but don't feel any malice either. Had he stayed at Google he would have made as much there.

            "let's talk about that"

            by VClib on Thu Apr 17, 2014 at 10:39:11 PM PDT

            [ Parent ]

            •  I Don't Feel Malice for Him (4+ / 0-)
              Recommended by:
              itsjim, No Exit, VClib, hbk

              But neither do I feel that the structure of golden parachutes is indicative of talent in the C-Suite, as too many folks here are claiming justifies the payment.  The $58M he got wasn't earned through his brainpower or Melissa Mayer's.  It was earned by the low level workers at Yahoo (and derivatively at Google, since I agree with you that the deal was intended to "make him whole" on his unvested options).

              Since of course none of the C-Suite could making their companies anywhere near the amount of cash that permits a $58M golden parachute but for those lower-level folks, most of who will be lucky at the next round of pump-up-the-shareholders-Christmas layoffs to get 1 week severance for every year of employment.

              And that's the point I'm trying to make.  The entire system of C suite compensation and incentives is based upon the anti-worker myth subscribed to by the business world (and, going by comments here, bought into by a lot of fools) that it is the corporate leaders, and not the many thousands below them, that generate wealth for the company and the stockholders (through their ideas and supposed management skill, although most C-suiters are terrible managers on a day-to-day basis, which is why they have armies of actual managers below them effectuating their will and they spend their time giving speeches and answering to the stockholders).  This is a entirely self-serving fiction created to justify what has become a morally untenable situation in terms of C suite pay vis a vis the workers at middle management and below, for 2 reasons:  (a) corporations are unwilling to test the idea that others, far less expensive and equally talented, could have equally great profitable ideas and be better at management than the narrow class of folks with "the right paper"; (b) You can have all the ideas in the world, but if you can't personally get them done without others, you don't deserve to make tens of thousands of times more than they do, especially when you fuck up at your job and lose it; for most, they will never see that type of money having never fucked up at their job when they get laid off.

              I've yet to see anyone in the C suite in recent decades here in Silicon Valley actually be good at creating something (other than lots of splashy ideas that they couldn't get done without all those minions who are not going to be getting $58M when they get fired for cause).

              Sorry, that's just how I see it.  And I've been here in Silicon Valley since 1978.

              I do not derogate his contractual rights, assuming as we both do that this was the deal he cut.  However, that this deal exists at all is what I believe is indefensible, for any reason.

              At this point, I just want America to admit that it still doesn't want its Black citizens to live in any state other than terror, subservience and inferiority, under pain of death. I can handle American racism, but I can't handle American denial.

              by shanikka on Fri Apr 18, 2014 at 05:09:56 AM PDT

              [ Parent ]

              •  I think your view of C-level executives is... (2+ / 0-)
                Recommended by:
                VClib, Sparhawk

                ...somewhat narrow. I work for a huge multi-national telecom company and have some insight into what they do. At least in the company I work for, the C-Level executives are not managers. They define high level business strategy and are the closers of big deals. By big, I mean multi-billion dollars. They don't toil over spreadsheets or craft detailed legal language, They have armies of people who do that. What they do is leverage peer level relationships with their counterparts who are authorized to execute deals of that magnitude, and close them. Anyone who thinks that this is easy, or something the average schlub could do has never swam in the really big fish tanks.

                Please note that I am not defending their obscene comp packages, or discounting the value of us worker bees. But to dismiss them as speech makers is not fair either.

                So endith the trick.

                by itsjim on Fri Apr 18, 2014 at 06:10:39 AM PDT

                [ Parent ]

                •  itsjim - I think you have a valuable insight (1+ / 0-)
                  Recommended by:
                  Sparhawk

                  At the Fortune 1000 the C-suite executives aren't really day to day managers, they are focused on big strategic issues and deals.

                  "let's talk about that"

                  by VClib on Fri Apr 18, 2014 at 07:07:59 AM PDT

                  [ Parent ]

                •  We Don't Disagree (2+ / 0-)
                  Recommended by:
                  hbk, itsjim

                  They aren't managers.  They are strategists, first and foremost.  And relationship people.

                  But now ask yourself why that particular skill set is orders of magnitude more valuable than anything else in a company.  And ask yourself what is the factual foundation for the assumption that this skillset isn't possessed by huge percentages of the folks that actually work for C-suiters?

                  I know quite a few C-suiters.  Most are very nice people and talented people.  But not uniquely so.  And maybe it's just my luck in terms of who I hang out with in that class, but few ever privately claim that they deserve to make what they make in the abstract.  That claim is made only in comparison to other people in the suite.  It is only that self-feeding exponential growth in pay (based upon the myth of 'rarity' in skill) that permits such a situation--and most C-suiters know it.  Few are so deluded as to think differently (unlike defending this package not based upon contract law, but on the merits of so-called C-suite worth).

                  At this point, I just want America to admit that it still doesn't want its Black citizens to live in any state other than terror, subservience and inferiority, under pain of death. I can handle American racism, but I can't handle American denial.

                  by shanikka on Fri Apr 18, 2014 at 07:23:35 AM PDT

                  [ Parent ]

                  •  Re (3+ / 0-)
                    Recommended by:
                    itsjim, shanikka, VClib
                    But now ask yourself why that particular skill set is orders of magnitude more valuable than anything else in a company.  
                    Because if mistakes are made at that magnitude they could cost the company millions or billions. "Regular worker bees" have far less ability to directly impact the bottom line.

                    (-5.50,-6.67): Left Libertarian
                    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                    by Sparhawk on Fri Apr 18, 2014 at 09:22:19 AM PDT

                    [ Parent ]

                    •  Ahh (0+ / 0-)

                      This myth I've actually seen implode in operation at the original Silicon Valley software companies from the late 1970's and early 1980s.  A mistake made in the C Suite is readily correctible by all those minions below.  And it is very easy to do so, all while keeping one's job.  In contrast, a serious mistake by someone on the operational line can and has cost companies millions in this valley.  Mistakes that the C Suite routinely then claims it knew nothing about.

                      At this point, I just want America to admit that it still doesn't want its Black citizens to live in any state other than terror, subservience and inferiority, under pain of death. I can handle American racism, but I can't handle American denial.

                      by shanikka on Fri Apr 18, 2014 at 11:03:01 AM PDT

                      [ Parent ]

                  •  You can't look at it that way. (1+ / 0-)
                    Recommended by:
                    VClib

                    It is a matter of responsibility. The CEO of the company I work for was responsible for $129 billion in revenue last year. By responsible, I mean that he had to lead an organization of 250,000 people to achieve those numbers in a highly competitive, high volume, super-regulated market, where the state of the art of technology is constantly changing and one bad decision could significantly impact the national economy. He is the one throat for the board of directors, and the millions of stockholders, and the government to choke. I can tell you that this guy doesn't sit around in an ivory tower eating caviar and thinking lofty thoughts.

                    You won't convince me that a "huge percentage" of the people who work for this guy would even be willing, let alone capable of shouldering that responsibility. Sure, there are probably a handful of people in the company with the necessary skills, background, and disposition and eventually some of them will get the chance to take that position. But those people don't grow on trees.

                    Put in perspective, as a relative bottom dweller, I was responsible for about $6 million of that revenue. So he was responsible for 21,500 times more business than me. But he wasn't paid 21,500 times my salary. Not even close. In fact, this company has taken pretty good care of me and my family, and 250,000 other families. Sorry, but I don't resent what he gets paid. You couldn't pay me enough to do that job.

                    So endith the trick.

                    by itsjim on Fri Apr 18, 2014 at 09:24:54 AM PDT

                    [ Parent ]

                    •  I Can, and Do, Look at it That Way (0+ / 0-)

                      Especially if one is getting paid for, ultimately, not having been responsible for the very thing that presumably justifies all that money.

                      You have no idea who would shoulder responsibility for what until you ask.  Worker cooperatives, successful ones, belie this idea that only overpaid C suiters are capable of emotionally, or decisionally, handling such "responsibility."

                      Also, I'm not sure where you get the idea that managing 21K times the revenue requires either 21K times the skill or 21K times the pay.  Try it sometimes =)

                      At this point, I just want America to admit that it still doesn't want its Black citizens to live in any state other than terror, subservience and inferiority, under pain of death. I can handle American racism, but I can't handle American denial.

                      by shanikka on Fri Apr 18, 2014 at 11:06:04 AM PDT

                      [ Parent ]

        •  Well, if he finds that to be a burden (4+ / 0-)
          Recommended by:
          shanikka, YouKnowMe, ChemBob, hbk

          I'll be happy to trade paychecks with him.

          If the pilot's good, see, I mean if he's reeeally sharp, he can barrel that baby in so low... oh you oughta see it sometime. It's a sight. A big plane like a '52... varrrooom! Its jet exhaust... frying chickens in the barnyard!

          by Major Kong on Thu Apr 17, 2014 at 07:43:00 PM PDT

          [ Parent ]

          •  MajorK - I don't think he has said anything (0+ / 0-)

            in public about the size of his severance or its taxation. I am sure he will take his after tax windfall and live an enjoyable life. My guess is that you will see him self-finance a startup and get back in the game.

            "let's talk about that"

            by VClib on Thu Apr 17, 2014 at 10:41:11 PM PDT

            [ Parent ]

    •  Well He Would If He Took It as Straight Compen (5+ / 0-)
      Recommended by:
      Trix, eyo, raboof, mooshter, hbk

      sation.

      Something tells me he can invest part of it into things like a 3 masted home or a libertarian educational broadcast network etc. and get more benefit from it than blowing a full 50% in the nominal tax rates.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Thu Apr 17, 2014 at 07:57:05 AM PDT

      [ Parent ]

    •  LOL - taxes are for the unwashed like you and I (9+ / 0-)

      Mr. de Castro's hard earned income is probably safely stashed in some offshore tax haven.

      “In the beginning there was nothing, which exploded.” Terry Pratchett

      by 420 forever on Thu Apr 17, 2014 at 07:59:51 AM PDT

      [ Parent ]

    •  Oh the humanity! - How in the world (2+ / 0-)
      Recommended by:
      YouKnowMe, hbk

      will he ever get by on $33 million after taxes.

      Election Day is Nov 4th, 2014 It's time for the Undo button on the 2010 Election.

      by bear83 on Thu Apr 17, 2014 at 08:04:47 PM PDT

      [ Parent ]

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