Within the last decade, Silicon Valley technology companies have increasingly engaged in a practice of providing nontraditional perks to employees, in what has been characterized as an “arms race” to attract engineering talent. As this practice expands throughout Silicon Valley, so do the costs associated with providing these perks. While companies view the practice as a tool to recruit talent, boost productivity, and increase efficiency, the IRS’s renewed interest in scrutinizing the tax laws casts doubt on whether these stated objectives would remain robust in the future.
This Note focuses on the practice of providing employee perks from a shareholder governance perspective. In particular, this Note identifies the challenges shareholders face in properly assessing how the costs associated with in-kind perks affect share value under the current corporate legal framework. This Note then proposes an interim solution for shareholders to address concerns about employer-provided perks. Ultimately, this Note aims to foster a conversation between shareholders and management in order to provide these key stakeholders with the appropriate knowledge to effectively confront the long-term consequences of this practice.
Employee Perks in Silicon Valley: Technology Companies Lead the “Arms Race” as Corporate Law Trails in Representing Shareholder Interests,
12 Hastings Bus. L.J. 51
Available at: https://repository.uchastings.edu/hastings_business_law_journal/vol12/iss1/3