For some CEOs, death is now the only certainty as they have managed to convince their boards of directors that the CEO is so valuable that the stockholders should not only pay him exorbitant compensation but they should also pay the taxes on much of that compensation. This practice is known as the "gross up". And it is growing. In 2000 38% of the companies surveyed by the Wall Street Journal followed the practice. In 2004, 52% did.
Consider the deal the CEO of Home Depot has: the tax payments [paid by the shareholders] on his perks were $3.3 million; that topped his base salary of $2 million. Coke has paid its CEO $4 million since 2000, Regions Financial paid its CEO $27.3 million in gross-ups. The deal the executives of North Fork Bank have could yield them - and cost the shareholders - $125 million. BEA Systems paid $600,000 to cover the taxes on four years of chauffeur service for its CEO. Unisys even pays the taxes on its former CEO's pension.
CEO of a large US public company: it's still the greatest job in the world.
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