have to pay the tax. So if the top owners are in the top tax rate, then those dividends have got to be at 37% or 35 anyway. The money that flows out of us is just that, 21%, or in North Carolina 24 because we've got a 3% state tax. But also it is the case here. Again, this may shock you, but so pervasive is our intent to grow and growth costs money that to the shareholders we don't pay dividends. And that's why being a C corp for us doesn't hurt us. If we paid dividends, those also would be taxable double taxation. But we don't pay dividends. The late-career people are sure to get some nice checks at the end of their careers. But we leave that money in the company because growth costs money and we are totally intent on growth. So I'm right here. Randy Wilburn: Do you all have different classes of stock, let's say like voting and non-voting? John R. McAdams: We do not, we keep it just totally traditional. Stock is stock. The, you know, the CEO runs the company but is subject to the board of directors on which he serves. 00:35:00 John R. McAdams: Ex officio voting. And no, it's just all straight up. The firm is run well so that everybody appreciates the firm. Frankly, there's a lot of love there and we don't want this kind of different hierarchy. You own some stock, but it's not voting stock. Stock is stock. We keep it simple. Yes. Okay, so employees that leave your organization, sell back their stock? Yes, yes. Our shareholders' agreement specifies this. Our shareholders' agreement specifies that the company has certain options if certain things occur. The number one thing triggering a possible option to buy is cessation of employment. And the company always does that. Maybe later I'm going to talk about one exception to that. But so yeah, you're leaving, you've divested for a few years, but now you've got the rest of your chunk left there. And we'll put them on a five-year payout, that is 60 months of checks to pay down what their value was. Enforcing a non-compete agreement makes it important that you pay that over time because if they leave the firm and then start competing with this, the shareholders' Agreement says you don't get 100% of this. If you leave and join a competing firm, you get 60%. If indeed you directly compete with us and try to pull our people or our clients away from us, it's not a 60% payout, it's a 35% payout. Okay? You enjoyed that benefit in our company and we are not going to pay you out 60 checks at full value when you're turning around and hurting us. So that's in the shareholders' agreement. Okay, question two. No, we do do bonuses. And, for some of the leaders, there's an incentive compensation plan. And yes, indeed, that does help them with their taxes, but it's just an incentive compensation plan. And those tend to be the same people who are getting some of the larger tax bonuses. So that does help. It actually, it is not. It is not. We don't
Made with FlippingBook Annual report