Quote:
Originally Posted by GGG
Yes they compensate him less than if he got the money upfront meaning he got less value from his contract meaning the NPV of his Salary in the year of the deferre comp was lower. Therefore the cap is lowered as well.
There is no free money here unless you think the LIBOR plus 1.25 is an awesome investment vehicle.
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And again, there is zero way of us knowing what the contract would have looked like without the deferred amount. You can’t assume it would be the NPV of this deal divided by 8, so therefore you can’t judge whether he did or did not in fact do better or did or did not in fact do worse.
The calculation of this exact contract amount both ways is determining a cap reduction relative to itself, not relative to what the other contract would have been. The other deal would have panned out differently. But we’ll never know. We weren’t involved in negotiations. So did he really actually get slightly more money in the end than just going straight 8…