Executive Compensation Week in Review: August 29, 2014
Reuters: Insurers Pay More Tax on Executive Compensation under Obamacare
According to a report from the Institute for Policy Studies, the elimination of corporate tax deductions on health insurance executive compensation above $500,000 under President Barack Obama’s healthcare reform law in 2013 generated more than $72 million in additional tax revenue for the government. The organization claims that if all corporations were to be taxed the same way, it would raise $50 billion more in revenue for the U.S. government.
Brendan Buck, a spokesman for the insurance industry’s largest lobbying group, America’s Health Insurance Plans, said, “Requiring plans to pay higher taxes does nothing to make coverage more affordable or accessible.”
Quartz: Big Corporate Crises Call for Big Executive Bonuses
In a study that is sure to irk some in the pay-for-performance crowd, Peter DeMarzo (Stanford Graduate School of Business), Dmitry Livdan and Alexei Tchistyi (UC’s Haas School of Business) suggest that instead of cutting bonuses or firing top executives in an underperforming company, companies may be better suited offering executives bonuses that are two or three times bigger than normal (with deferred payouts), and even some forgiveness for bad results. The scholars’ recommendations are based on a branch of business research known as optimal-contract theory.
SH&P: Say on Pay Voting Results
As of August 27, 2014 3,028 companies have held Say on Pay votes in 2014.
- 60 companies (2.0%) have failed with an average 60% ‘Against’ vote
- 71% of companies have received a greater than 90% ‘For’ vote
- Average vote among all companies
- 90.3% ‘For’ vote
- 8.1% ‘Against’ vote
- 1.6% Abstain
Huffington Post: Ex-Kroger CEO Admits He Was Paid A ‘Ludicrous’ Amount
During an Aspen Ideas Festival panel, David Dillon, chairman and former CEO of the grocery chain Kroger, called his own eight-figure paycheck “ludicrous.” Dillion went on to say that even though his total compensation was nearly $13 million last year, he was still only in the bottom 25 percent of CEO pay among peer companies.
TED Blog Video: Two Monkeys Were Paid Unequally
What happens when you pay two monkeys unequally? Watch what happens in an excerpt from the TED Talk: “Frans de Waal: Moral behavior in animals.”
Thanks to Broc Romanek at compensationstandards.com for bringing this to our attention.
Sacramento Business Journal: Lawmaker Revives Bill to Tax Companies for High CEO Pay
In May, the California state Senate kicked back a measure that would raise corporate taxes on publicly-traded companies that paid chief executives 100 times as much or more as the company’s average worker. The Senate agreed to reconsider the legislation by Sen. Mark DeSaulnier if he could make it more palatable.
Senate Bill 1372 has returned with a change: Corporations with high CEO pay would still be penalized with higher corporate taxes, but the proceeds would flow into a program that offers tax credits to businesses planning on relocating or expanding in California.