Vince Cable, the Liberal Democrat Treasury spokesman, said that insisting bonuses are paid in shares instead of cash was not enough. “Traders are doing that anyway, because the shares are cheap, and capital gains tax is only 18%,” he said.
So bankers are already being paid long term, not short term, incentives.
The problem with this is what?
2 responses so far ↓
1 DanW // Jul 5, 2009 at 10:43 am
Vince is well off here. Any shares recieved are taxed as income when given. Any subsequent gain is taxed with CGT but that is only the same is receiving a cash bonus and investing it in shares.
IMO the best way is restricted shares (i.e. cannot be sold for e.g 3 years)
2 Johnathan Pearce // Jul 5, 2009 at 11:44 am
There has been quite an active media campaign – not necessarily concerted – to have V. Cable portrayed as some sort of sage of wisdom. But he isn’t; much of his commentary is bog standard: “we all need more regulations/taxes/clampdowns on X” blah-blah. For sure, he is an economist by training, and his manner comes across well, but he’s over-rated.
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