> Twenty-five years ago, Bill Clinton campaigned on an idea for limiting excessive pay for American CEOs: Cap the tax deductibility of top executives' compensation at $1 million, and companies, not wanting bigger tax bills, might reel in their pay. In his 1993 budget, advisers suggested a compromise: Companies couldn't deduct CEO pay over $1 million unless it was "performance-based."
> But many believe the loophole had the opposite effect, driving companies instead to pay more in stock options and certain performance-based bonuses, which actually supercharged the growth in CEO pay. In 1989, according to the left-leaning Economic Policy Institute, the median value of annual CEO compensation was $2.7 million. By 1995 it was $6.6 million, and it reached $13 million in 2016.
> Twenty-five years ago, Bill Clinton campaigned on an idea for limiting excessive pay for American CEOs: Cap the tax deductibility of top executives' compensation at $1 million, and companies, not wanting bigger tax bills, might reel in their pay. In his 1993 budget, advisers suggested a compromise: Companies couldn't deduct CEO pay over $1 million unless it was "performance-based."
> But many believe the loophole had the opposite effect, driving companies instead to pay more in stock options and certain performance-based bonuses, which actually supercharged the growth in CEO pay. In 1989, according to the left-leaning Economic Policy Institute, the median value of annual CEO compensation was $2.7 million. By 1995 it was $6.6 million, and it reached $13 million in 2016.
Ref: https://www.washingtonpost.com/news/on-leadership/wp/2017/11...