Green Corporation has several employees. Their names and salaries are listed below.
|
Samantha |
$600,000 |
|
Chris (Samantha’s daughter) |
100,000 |
|
Joey (Samantha’s son) |
100,000 |
|
Jack (an unrelated third party) |
250,000 |
Chris and Joey are the only shareholders of Green Corporation. Samantha and Jack share equally in the management of the company’s operations. Chris and Joey are both full time college students at a university 200 miles away. Green has substantial E & P and has never distributed a dividend. Discuss problems related to Green’s salary arrangement.