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Denmark: No aid for companies which pay out dividends or are reg. in tax havens

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Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#121

Post by dkural »

barbegal wrote: post #116
flexie wrote: post #84

Danish lawyer here. The proposal only limits payments to companies that have received more than DKK 60 million (around EUR 8 million) in aid. So this is not your usual business owner. These are generally larger companies with a well paid management. As for companies registered in tax havens, the EU has made an official list of tax havens, which will be followed: https://en.wikipedia.org/wiki/European_Union_tax_haven_…

If these companies aren't allowed to pay a dividend until they have paid back the government aid, isn't the government effectively taking an ownership stake?

No it's not. The government won't own any shares that benefit from an increase in share price, nor will they receive dividends. The government can only receive the government aid back. It works as a forgivable loan. Loan-holders almost always come before equity-holders, and they could require full payment before dividends to equity holders.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#122

Post by martin_bech »

brtkdotse wrote: post #108
WrtCdEvrydy wrote: post #85

Earlier quoted context omitted.

Most tech companies don't dividend... you buy the stock or sell it based on their current profits.

I cannot for the life of me understand why’d someone who’s not an institutional investor (say Buffet) would want to own stock in a company that doesn’t pay dividends. It’s basically buying a vanity plate and hoping someone else will buy it for more down the road.

Because taxes.. Warren has explained this himself many times. The US Tax system makes it better to have rising stock prices, than dividends.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#123

Post by toomuchtodo »

0xffff2 wrote: post #105
toomuchtodo wrote: post #51

Earlier quoted context omitted.

Depends on scale. American Airlines in the US used 80 percent of their profits for several years for share buybacks ($12.5 billion from 2010-2019). Not R&D, not salary increases for workers. Does that deserve a bailout that preserves existing ownership? That’s the target. That sort of behavior should be nuked from orbit. I’d agree it’d be different if your business is small (less than $10M/year in turnover); you’d lo…

Why? Where exactly is the tipping point where dividends/buybacks become unacceptable? Unless you want to completely outlaw dividends and share buybacks (in which case you might as well do away with public companies), you're inherently putting the government in the position of defining completely arbitrary rules about how profitable a company is allowed to be.

Yes, that is the role of government, deciding who does and does not get a bailout based on criteria developed by policy makers, using taxpayer funds. Bailouts are not entitlements.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#124

Post by d0100 »

flexie wrote: post #84

Danish lawyer here. The proposal only limits payments to companies that have received more than DKK 60 million (around EUR 8 million) in aid. So this is not your usual business owner. These are generally larger companies with a well paid management. As for companies registered in tax havens, the EU has made an official list of tax havens, which will be followed: https://en.wikipedia.org/wiki/European_Union_tax_haven_…

> The government should take a small ownership stake in companies that receive that kind of money.

This sounds absolutely reasonable. Bail them out by being some sort of "angel investor" and get a piece of the company

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#125

Post by evmar »

brtkdotse wrote: post #108
WrtCdEvrydy wrote: post #85

Earlier quoted context omitted.

Most tech companies don't dividend... you buy the stock or sell it based on their current profits.

I cannot for the life of me understand why’d someone who’s not an institutional investor (say Buffet) would want to own stock in a company that doesn’t pay dividends. It’s basically buying a vanity plate and hoping someone else will buy it for more down the road.

I used to have some trouble with this one but if you think about it it's the same as "why would anyone want a dollar, it's just a piece of paper". The answer is that for literally anything, if you can exchange the thing for value, then it effectively has that value.

(Or alternatively, you say that dollars are also vanity plates, and are as worthless as stocks.)

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#126

Post by chrisseaton »

Agathos wrote: post #114
chrisseaton wrote: post #86

Earlier quoted context omitted.

Many workers are paid a majority of their income in the form of stock from the company they work for.

Suing your employer for wage theft because 1. They are still paying your salary, and 2. They are still granting you stock, but 3. They have suspended dividends on the shares you were granted seems like a reach. I'd definitely be interested in reading about it if someone actually tries it, though!

Not sure who you're replying to. I didn't mention suing anyone or any idea of wage theft.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#127

Post by NovemberWhiskey »

Saaster wrote: post #27

It's a good common sense start. Companies that pay dividends or make share buy-backs are more vulnerable in a crisis (not only the current one), meaning they are riskier investments. Risk needs to be inversely correlated with reward for the markets to function. Investors in riskier companies deserve to get wiped out, not propped up. Companies registered in tax-havens should have no business applying for EU or US aid.…

> Companies that pay dividends or make share buy-backs are more vulnerable in a crisis (not only the current one), meaning they are riskier investments.

You present that as a statement of fact; but it's not at all clear to me why that should be true. Can you give your thinking on that?

A company may not be paying a dividend because it's reinvesting; or because it's unable to do so because it's making a loss.

Do you think Facebook (no dividends; almost completely dependent on advertising budgets) is a less vulnerable, less risky investment than AT&T (regularly pays substantial dividend)?

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#128

Post by soperj »

tonyedgecombe wrote: post #79
Saaster wrote: post #27

It's a good common sense start. Companies that pay dividends or make share buy-backs are more vulnerable in a crisis (not only the current one), meaning they are riskier investments. Risk needs to be inversely correlated with reward for the markets to function. Investors in riskier companies deserve to get wiped out, not propped up. Companies registered in tax-havens should have no business applying for EU or US aid.…

Companies that pay dividends What’s the point of a company that never pays a dividend.

Berkshire Hathaway has only paid 1 dividend ever (in 1967). Buffett can invest that money better than I can, so why bother taking money out of the company.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#129

Post by kaibee »

chrisseaton wrote: post #86
throwaway2048 wrote: post #61

Earlier quoted context omitted.

Return from investment is nothing like salary.

Many workers are paid a majority of their income in the form of stock from the company they work for.

How many as a percentage of workers in the USA? How many of those are earning below 200k a year?

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#130

Post by netcan »

flexie wrote: post #84

Danish lawyer here. The proposal only limits payments to companies that have received more than DKK 60 million (around EUR 8 million) in aid. So this is not your usual business owner. These are generally larger companies with a well paid management. As for companies registered in tax havens, the EU has made an official list of tax havens, which will be followed: https://en.wikipedia.org/wiki/European_Union_tax_haven_…

What is the positive criteria?

Who gets aid, and how is the amount calculated? It's somewhat surprising that foreign company would be eligible at all.

Also, I'm skeptical of "common sense rules" being effectively implementable.

Company A1 owns intellectual property like trademarks and patents, registered in a tax haven. Company A2 manufactures & markets products in the consumer country. A2 could be paying licence fees to A1. A1 could be contracting A2 to do manufacturing and marketing. Either way, the idea is that A2 never makes profits. Any profits are made in A1, which also has no expenses.

This is/was Google & Apple's structure, with Ireland as the tax haven.

This is a simple example. Reality is usually more complex. It is generally hard/impossible to pick these knots apart. IDK of any country with corporate tax rules/enforcement that has picked it apart. Lots have tried. How did denmark do this.

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