Monday, September 05, 2016
Pay for Performance
President Clinton was able to limit companies to deducting only a maximum executive pay of $1,000,000 except if the pay was for performance by the executive. This performance pay can be deducted from the company's income tax. A study by the Institute for Policy Studies looked at the top 20 US banks and found that more than $2 billion in performance bonuses was paid to their top five executives over the past four years. These payments cost us more than $725 million in taxes we had to pay. The executives of the big banks did well, the performance pay of Wells Fargo CEO was $155 million in fully deductible performance pay at a cost to taxpayers of $54 million.