Chuck Grassley in Saving Capitalism, by Robert Reich

On Tax Reform: Took $150M stock options to save Starbucks $82M in taxes

The 1993 provision allowing corporations to deduct from their tax bills executive compensation in excess of $1 million if tied to company "performance" soon became a sham. Even Senator Charles Grassley, the Republican chairman of the Senate Finance Committee in 2006, saw through it: "It was well-intentioned," he said. "But it really hasn't worked at all. Companies have found it easy to get around the law. It has more holes than swiss cheese. And it seems to have encouraged the options industry. These sophisticated folks are working with Swiss-watch-like devices to game this Swiss-cheese-like rule."

One such game has been to hand out stock "performance awards" on the basis of nothing more than an upward drift in the value of the stock market as a whole, over which CEOs presumably played no role other than watch as their company's stock price rose along with that of almost every other company.

Source: Saving Capitalism, by Robert Reich, p.105-6 May 3, 2016

The above quotations are from Saving Capitalism For the Many, Not the Few by Robert B. Reich. Click here for other excerpts from Saving Capitalism For the Many, Not the Few by Robert B. Reich. Click here for other excerpts by Chuck Grassley. Click here for a profile of Chuck Grassley.
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