Saturday, March 05, 2016
Cutting taxes
In 1993 a law was passed limiting federal tax deductions on top officers’ compensation to $1 million a year per executive. However, there was a section in the law referred to as “performance-based” compensation; it was not and is not subject to the $1 million limit. So, as you would expect most companies claim that the salary of the CEO and others has a strong component of pay for performance. In 2014, 76% of the total compensation was tax-deductible, i.e., pay for performance.
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