Why talk about dividends? As you should know, Warren Buffet isn't a fan of dividends, and brk pays no dividends. There are quite a few tax benefits by using stock options which I cannot be bothered to list them all.
The most important benefit is that the company can use the money saved to invest right now instead of paying it upfront in taxes. The employee also saves by being able to decide which tax bracket he falls in and when to liquidate and incur taxes (likely when a Republican is in office).
Those are good theoretical arguments, but Buffett's income is much more likely to be in the form of dividends and taxable gains than stock options. He does own non-Berkshire stock (or at least did fairly recently; there are SEC filings indicating that he had a substantial personal stake in USG in 2006.)
They are not theoretical. It's amusing how you think you are smarter than these billion dollar corporations in saving money.
Your conjectures on the other hand, are theoretical. If you actually knew what you were talking about, you would know that USG hasn't paid dividends since Feb 21, 2001. And interestingly this happened shortly after the first SEC filings that showed Buffet bought USG.
They're not trying to save money; they're paying a tax to raise money from the capital markets.
I'm aware that USG doesn't pay a dividend; it's probably not Buffett's only stock. Your argument is that Buffett gets most of his income from stock options (which he publicly condemns) not from dividends and capital gains (even though he does have his own portfolio).
Why would they pay a tax to raise money from the capital markets when according to you, they save money by paying a regular salary? And if you were really aware that USG doesn't pay a dividend, then why did you bring it up as evidence that it applies to Warren Buffet?
So far the burden of proof lies on __you__ to prove that Buffet gets most of his income from dividends since all the evidence points otherwise. Not the other way around.
This is basically what you are saying:
Buffet probably earns a lot through dividends in his personal stocks instead of the massive holdings he has from Berkshire, but I have absolutely no evidence. I will also ignore all evidence that the stocks he holds pay out no dividends, and the fact that he has publicly denounced dividends and doesn't pay them in his own billion dollar company Berkshire.
Why would they pay a tax to raise money from the capital markets when according to you, they save money by paying a regular salary?
Historically, companies that need to raise lots of money have found it easiest to do so by being publicly traded. Even though there are tax disadvantages, it can still be net beneficial.
I am not arguing that he just gets his income from dividends. I assume capital gains are part of the mix. Your claim is that he receives stock options, right? (If he trades them, the capital gains treatment is not so friendly.) But who is giving him these options? And why?
My argument is just that he's more likely to make money from dividends and capital gains than from stock options. Obviously, that's not his only source of income. He's traded copper futures. Maybe he gets speaking fees. Maybe he has an eagle-eye for dropped change, and tracks down the droppers so he can file a 1099 and report the income he earned from them.
My argument is just that he's more likely to make money from dividends and capital gains than from stock options.
Then this is something that you will have to prove with cold hard facts since all the evidence points otherwise...and not just because you don't like what Warren Buffet is saying.
Why do you think so many CEOs like Steve Jobs have a $1 salary? Do you really think it is because they want to pay more taxes?