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What’s Excessive Pay?

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2 Responses

  1. Shag from Brookline says:

    Like pornography, I know it when I see it.

  2. matth says:

    This used to come up a lot in tax law (before the rise of the LLC): the most tax-efficient way for owner/employees to extract earnings from corporations was through salary, rather than dividends. But it’s my sense that the case law generally failed to identify any meaningful principles, beyond maybe comparisons to peer firms. And comparisons to peer firms are of limited value here, where the problem is sector-wide.

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