The oil billionaire looms large in Calgary, as a man with a stake in many of the things the city cares about: oil, hockey and the mountains.Edwards is known first and foremost as a highly successful businessman. So if he left the country for tax reasons, as is suspected, are other Albertans following suit? Edwards himself refutes the notion his change of address from Calgary to London is to avoid a higher tax bill, telling the Globe and Mail that he left the country for personal reasons.in order to make them more valuable, it seemed like a problem that would come and go quickly... What’s distinctive about this one is that the benefits companies got from backdating were so small.
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Former Nortel CEO John Roth cashed in his stock options in 2000 for a personal gain of $135 million — all taxed at a special low rate — shortly before the company’s spectacular collapse left investors with heavy losses and thousands of Nortel employees out of work.
If you’re a top executive at a major corporation, no need to read further; you’ll know all this. You’ve probably heard of “executive stock options” — a perk that allows corporate executives a special deal on purchasing the company’s stocks. Writing in the Wall Street Journal, the renowned business scholar at Mc Gill University Henry Mintzberg argued that executive stock options “represent the most prominent form of legal corruption that has been undermining our large corporations and bringing down the global economy.” Canada compounds the problem by adding a special tax break that makes executive stock options even more lucrative — and costly to the Canadian treasury.
Alberta has seen a much sharper increase than other provinces.
In 2014, it charged a flat income tax of 10 per cent for all income levels.
The backdating companies broke this rule: they reported how many options they were issuing, but conveniently omitted the fact that they had been backdated. The bigger reason for choosing to backdate is to get around some bothersome accounting regulations.
In Washington, people say that it’s not the crime that gets you—it’s the coverup. [C]ompanies didn’t need backdating to lavish huge sums of money on their executives: they could have issued more at-the-money options to make up the difference, or they could have just handed out grants of stock. Until recently, the regulations distinguished, for no good reason, between in-the-money and at-the-money options.
Yet, as pre-election controversy swirls around income-splitting and Stephen Harper’s other tax breaks favouring high-income earners, this — the gorilla of all tax breaks — remains largely out of sight.
It’s hard to think of another tax break that benefits so few people so much — and for no good reason.
For instance, 75 of Canada’s 100 top-paid CEOs held executive stock options in 2013.
Economist Hugh Mackenzie has shown that the total value of their tax savings amounts to 5 million, or an average tax saving of .6 million each.
And you may suspect that these stock options are connected to the rampant greed and corruption that have plagued the corporate world in recent years. So when Opposition leader Tom Mulcair announced earlier this year that an NDP government would scrap the tax break entirely, nobody rushed to its defence.