Why bonuses are paid
Donald trump explained it very well about 1 1/2 years ago.
Seems his Casino was not making big money and he filed for bankruptcy. He was drawing 1 million $ as a salary from the Casino. The workers band together and pinched every penny to get the company out of Bankruptcy and just barely into the black. As soon as this happened Donald gave himself a 2 million$ increase in salary and filed for Bankruptcy again.
While this was going on Donald came on the TV and told people just what I said. AND then he proceeded to tell the audience Why Bonuses are paid.
Bonuses are paid for a few reasons.
1. A contract that says a bonus gets paid if the contract is fulfilled. (this is really not a bonus it's a contract)
2. A company is doing extremely well and decides to reward it's employees (Walmart is a good example)
3. A company is doing ok and the money it has in the Black needs to be spent on the ledger book
4. If a company has "Profit" the tax man takes most of that
5. If a company has profit the company pays dividends to it's share holders
So, In order for the money to go to the higher employees, a "Bonus" is given, which eliminates, Profit, Tax on profit, and large dividends.
And if a company goes into the red because of Bonuses, Then Bankruptcy can be filed and the debts are all but erased.
What a crappy way to do business, but a profitable way for the higher up in the company. Screw everyone else. Employees, share holders, venders.
Ron
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