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Showing posts from April, 2011

Twitter's San Francisco Payroll Tax 'Deal' and Why Stock Option Compensation Matters

Last week, San Francisco’s Board of Supervisors voted to approve the Mid-Market Payroll Tax Exclusion, legislation which will give Twitter a tax “break” for moving into San Francisco's Mid-Market neighborhood, an area of the city with a less than stellar reputation and one which San Francisco hopes to revitalize. 
How will this exemption work for Twitter and why was it so important for Twitter to secure it?
This legislation, which came after months of discussion between Twitter, San Francisco’s mayor, and the city’s Board of Supervisors,  was a response to Twitter’s announcement that it was evaluating whether to stay (and expand) in San Francisco or relocate outside of the city.  Moving out of San Francisco, Twitter had determined, could save the company a substantial amount especially if the Company were to go public.  Key to Twitter’s decision, was the impact of San Francisco’s Payroll Expense Tax.  This tax is imposed on all companies with payroll in excess of $250,000, and is ca…