Under the FAR® Program, Managers’ incentive or performance comp is worth more.
Tax-Deferred Investing Is a More Powerful Accumulator:
- You double your investment. If you earn $1 million of IC, you invest the full $1 million rather than the after-tax amount (assume $500,000).
- You do not pay taxes on gains. Your wealth accumulates at almost double the rate of return. If your IC grows by 10%, you would have $1,100,000. If you invested your $500,000 on an after-tax basis, you would pay taxes on your gain leaving you with only $525,000.
The FAR® Program provides a demonstrably better alternative to carried interest or performance fees.