Do employed directors get paid in dividends?

nicechap

Stu6781 wrote: »

.... I just wanted to know if it was common place for a non equity director to be paid in dividends. That’s it.

Maybe ask CBI to survey their members and share the data with you.

How many dividend paid directors do you think spend their spare time on MSE?

Manxman_in_exile

Stu6781 wrote: »

In my accountancy firm, my director (non equity/non shareholder) gets paid in dividends? Is this odd?

Is your firm a company or a partnership? If it's a company I'm not sure how he can be paid in dividends if he doesn't own any shares. Do you mean it's a partnership and he shares in the profits? (Although if he doesn't have any equity in the partnership I'd have expected him to be salaried).


How do you know the details of their pay? I wouldn't expect it to be generally known within an accountancy firm how the "directors" are paid.


EDIT: Personally, if I were an accountant employed by the firm, I wouldn't consider it any of my business - unless I were involved in preparing the accounts, in which case I don't think I'd be asking questions on here.

motorguy

Theres (at least) two roles at play here.

(1) Company Director of a Limited Company. May well take a small salary and dividend payments. I am a Director of my own Limited Company, thats what i do.

(2) Company Director of a Company - "Finance Director", "IT Director", most likely paid a salary and may well have a profit share or share options.

I guess option (3) is someone who is both (1) and (2), and opts to take a small salary and dividends.

Your typical large company / corporation will most likely be option 2, small family owned companies will be 1 or 3.

steampowered

Dividends are paid to shareholders, proportionate to their shareholding. here is no such thing as a "non-equity dividend".

The accountancy firm you are talking about may be probably a limited liability partnership, and it may be that the person you are talking about is a partner.

Manxman_in_exile

I'm surprised that a qualified (ACCA) accountant should have to ask a question like this.

marlot

Stu6781 wrote: »

In my accountancy firm, my director (non equity/non shareholder) gets paid in dividends? Is this odd?

Is it a limited liability partnership?

FTBuyerGlasgow

Check Companies House, they will have an Annual Return with details of all shareholders.

You can also search CH for director's names but can get a lot of hits, "John Smith" will probably throw up tens of thousands of hits. Best to search for the company then click the "Officers" tab.

Won't work for a Private Partnership or Sole Trader as these aren't registered on CH but every other adaptation of a company it will show up.

EDIT: dividends get taxed at 7.5% for basic rate tax payers, so minimum PAYE and whack on dividends. I'd say it's a fairly common way to cut income tax.