More on Golden Parachutes

Executive compensation continues to be a hot issue with the media and the public. Here's our last post about Golden Parachute issues. Today I came across an article from the Associated Press dealing with another stealthy extension of this issue: tax payments. Turns out that not only are CEO's being awarded golden parachutes when asked to leave due to mergers or poor performance, but the companies are then paying the personal federal income taxes due on this compensation.

These tax provisions, also known as gross-ups, took root with the creation of the federal excise tax in the 1980s. The tax was intended as a deterrent against making parachutes too golden, but quickly backfired as companies responded with gross-up pledges to "make the executive whole."As the AP Article noted, the issue doesn't really seem to be about making executives whole as it does making them "a whole lot richer."Technorati Tags:Categories: