April 13, 2009

Top of the morning

Posted at 7:40 AM by Chris Fitzsimon

A recent Bailout Watch from Consumer Reports focuses on another aspect of the ridiculous executive compensation packages that corporate America takes for granted, the tax gross-ups.

Companies not only shower CEOs with tens of millions in pay and fringe benefits, like personal use of the corporate jets, they even pay the taxes owed on the compensation packages.

Key Corp, which owns small banks in 14 states, paid its chairman and chief executive officer Henry L. Meyer an additional $2,912 for the taxes he owed because the company paid his country club dues.  Meyer also was reimbursed for the taxes due because the company paid for the security system on his home.

As Bailout Watch put it.

Given that Meyer’s total compensation in 2008 was $4.9 million, coming up with cash on his own to pay those income tax obligations might be a tad less challenging than it would be for most Americans.

Just a tad.

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2 Comments

2 Comments Add yours »

AdamL 13 Apr 2009 9:32 am

As Slate wrote: “This tax buy-off is known as a ‘gross up’ because beneficiaries receive ‘gross’ pretax sums rather than net post-tax sums — although it is also well-named because of the reaction it provokes in shareholders: a pressing need to vomit.”

Eugene Barufkin 14 Apr 2009 12:44 am

Tax all personal income above one million at 50%.
25% Federal and 25% State.

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