Howard Schultz in Saving Capitalism, by Robert Reich

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

You and I, and other taxpayers, are subsidizing [high pay for corporate executives].That's because corporations deduct CEO pay from their income taxes, requiring the rest of us to pay more proportionally in taxes to make up the difference. To take but one example, Howard Schultz, CEO of Starbucks, received $1.5 million in salary for 2013, along with a whopping $150 million on stock options and awards. That saved Starbucks $82 million 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.

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 Howard Schultz. Click here for a profile of Howard Schultz.
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Page last updated: May 03, 2021