Your firm can reincorporate in an offshore tax haven like Bermuda. This would be legal, at least currently, although tax laws might be changed to penalize the move since you're not the only company pursuing this strategy. So, your firm's action has contributed to government mobilization for stepped up corporate taxation in the long run (minus 2). Short-term gains enjoyed by shareholders will make shareholders subject to a hefty capital gains tax. The fact that even if their shares rise they will barely break even after taxes gives the shareholders a dim view of the company's decision (minus 2).The public perceives the move as a tax-dodging trick that erodes respect for tax law, and establishes the nominal postal-drop headquarters as a sham, and they will consider it an unpatriotic gesture to boot. In top newspapers op-ed commentary reflecting such sentiment specifically references your company's name (minus 10).The firm's worldwide tax bill will be cut (plus 8), which would otherwise lift the overall reputation of the company, were that not offset by news that the chief executive will get higher pay, bonuses, and profits on the sale of stock options. This kicks up sentiments of resentment and an impression of unfairness (minus 8).Pursuing the alternative of staying put means the tax liability remains substantial (minus 6). However, the op-ed piece that otherwise would have lambasted your firm instead praises its forthrightness and patriotism, generating substantial goodwill and publicity (plus 10).Reincorporation results in –14, while staying put equals +4. All in all, the reputational gains of staying put outweigh the reputational losses of reincorporation.
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