CEO Compensation: Close loophole

While paychecks are obscene, the corporate fat cats are a tax write-off, too

It's bad enough that corporations have allowed compensation for top executives to spiral out of control.

Now comes a new report saying tax and accounting loopholes have contributed to the problem of outlandish pay for CEOs.

That's right, taxpayers are subsidizing the runaway train that is corporate compensation.

So
says this year's version of an annual report on corporate income from
the Institute for Policy Studies and United for a Fair Economy.

The
report says large U.S. companies paid their top administrators an
average of $10.5 million in compensation last year — a staggering 344
times what the average worked earned in 2007.

That's right, 344 times. And that's the average of administrators in the S&P 500.

The
report said the top 50 private equity and hedge fund managers received
an average of $588 million, which is 19,000 times as much as the
average worker.

The numbers are staggering in themselves,
but they're downright galling considering that the gulf between CEOs
and working Janes and Joes was about 35 to 1 three decades ago.

Even
worse, the disparity is related partly to public policy — specifically,
loopholes that allow execs and businesses to avoid paying about $20
billion in taxes per year.

The report said corporations
saved $10 billion on one loophole alone — a double standard that allows
companies paying executives stock options to deduct more than their
actual expenses.

For example, the report said,
UnitedHealth Group Inc reported that it cost the company nothing to
include stock options in CEO William McGuire's compensation package.
But the company claimed a tax deduction of $317.7 million, the groups
said.

Corporations also saved $5.2 billion thanks to the
failure of policymakers to place a limit on deductibility of executive
compensation.

Enough.

Here's hoping Congress is paying attention to the report's findings.

Granted, the IPS has been criticized as left-leaning, so the information should be taken with a grain of salt.

But the report provides food for thought for liberals, conservatives and everyone in-between.

Assuming the situation is as bad as the study suggests, lawmakers should take action to shut off the subsidies.

Corporate
CEOs are doing just fine, thanks, without adding to the tax burden of
workers they're already out-earning by hundreds — even thousands — of
times.