An investment fund manager saves about $200,000 in tax through converting top executives ordinary income into capital gain. Equilar found that deferred compensation plan balances increase 54.3 percent which means that top executive pay keeps increasing. Tax law allows corporations to deduct the cost of executive compensation from their income taxes, as a business expense as long as this compensation remains reasonable. This law encourages corporations to take the maximum executive pay to offset income taxes. There are weaknesses in Sarah Anderson et al’s article. She uses CEOs pay package which includes salary, bonus, perks, and stock awards to approve her point. But this is not the reason to say that CEOs pay are not reasonable. CEOs are the ones who responsible for the business and they needs to take care business from all aspects. Even though they did not personally take live risk, the pressure they assume are much more than what we can image. The article mentioned that the federal government encourage high executive pay and executive compensation could offset income tax. We should not only take money into consideration. This tax law might be a method that government use to promote businesses and economy to a higher level, which may be better for the
An investment fund manager saves about $200,000 in tax through converting top executives ordinary income into capital gain. Equilar found that deferred compensation plan balances increase 54.3 percent which means that top executive pay keeps increasing. Tax law allows corporations to deduct the cost of executive compensation from their income taxes, as a business expense as long as this compensation remains reasonable. This law encourages corporations to take the maximum executive pay to offset income taxes. There are weaknesses in Sarah Anderson et al’s article. She uses CEOs pay package which includes salary, bonus, perks, and stock awards to approve her point. But this is not the reason to say that CEOs pay are not reasonable. CEOs are the ones who responsible for the business and they needs to take care business from all aspects. Even though they did not personally take live risk, the pressure they assume are much more than what we can image. The article mentioned that the federal government encourage high executive pay and executive compensation could offset income tax. We should not only take money into consideration. This tax law might be a method that government use to promote businesses and economy to a higher level, which may be better for the