CORPORATE CRIME REPORTER
One
Fifth of CEOS Get Personal Taxes Paid by Company
22 Corporate Crime Reporter 14, April 1, 2008
One-fifth of American CEOs get some portion of their income taxes paid by the
company.
That’s according to a survey released by The Corporate Library.
The payments, known as tax gross-ups, are often buried in corporate documents.
The survey of 650 CEOs found that 20 percent of them received tax gross-ups for perquisites such as housing, gifts, security, country club fees, executive retreats, and even PS3s.
Staff at The Corporate Library dug through 3,297 proxy statements filed between February 2007 and February 2008.
“The sight of Angelo Mozilo – the CEO of troubled Countrywide Financial – defending his request to the board to have the income tax due when his wife travelled for free on the corporate jet paid by the shareholders gave me pause for thought,” said Paul Hodgson the author of the report. “So I decided to find out how common this kind of practice was. Jaded though I am, I have to admit to being surprised at the extent of what I like to call the grossest perk.”
While most of the tax gross-ups were attributable to the provision of perquisites, 30 CEOs – including Chad Dreier, CEO of housing company Ryland, and J.W. Stewart, CEO of oil services company B.J. Services – had income tax grossed up on restricted stock awards and/or bonuses.
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