Originally published February 7 2006
Companies give top execs extra money to pay taxes
by Mike Adams, the Health Ranger, NaturalNews Editor
More than half the largest companies in the U.S. give top executives extra money to pay taxes on corporate perks they receive like luxury cars. Executives cited included Home Depot CEO Robert Nardelli, who received at least $3.3 million.
More than half the nation's largest companies are giving their top executives extra money to pay taxes due on corporate perks such as luxury cars and even on capital gains, according to a published report.
The Wall Street Journal reports that a study the paper ordered from compensation-research firm Equilar Inc. found that 52 percent of the nation's 100 largest public companies revealed that they gave the extra payments to cover taxes, known in the industry as "gross-ups," to one or more top executives last year.
The paper reports the company issued a written statement that said the payments to Nardelli were properly disclosed and that "consistent with the company's philosophy of attracting and retaining the highest performing leadership available, gross-up payments are sometimes utilized as a part of compensation to achieve a net after-tax effect."
The biggest potential gross up payments could go to executives of North Fork Bancorp, a Long Island, N.Y.-based bank that could pay three top executives $125 million or more to cover taxes on gains they would see if the bank is sold at close to current market prices, according to the paper.
While those kinds of change in control provisions are meant to protect executives who lose their jobs in acquisitions, Moore ended up running the combined company and still getting the payment.
CEO J. Frank Harrison has received more than $4 million since 2000 to cover taxes on a big restricted-stock grant, and Federated Department Stores, which paid executives' taxes due on the discount they received on purchases from the company's stores.
The paper reports that a Regions spokeswoman declined to comment, and that Coca-Cola Bottling spokeswoman, Lauren Steele, says in a written statement that Harrison's restricted-stock plan "was unanimously passed by the compensation committee, overwhelmingly approved by shareholders and all proper corporate governance protocols were followed."
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