Board members at Oracle, the business software colossus, last year extended to their billionaire CEO Larry Ellison $94.6 million in performance-based compensation. If Ellison “performs,” he’ll collect all those millions.
If Ellison “performs,” Oracle will benefit big-time, too. The company will be able to deduct every cent of that “performance” reward off its U.S. corporate taxes.
So how will Oracle determine whether Ellison has “performed” adequately enough?
The company, notes this welcome new report from the watchdog group Public Citizen, has set 23 performance criteria that “can be considered when granting equity awards.” Oracle execs can collect their “performance” pay if they meet just one of these criteria!
In other words, Oracle has stacked the performance deck — and the biggest loser in this heads-I-win, tails-you-lose charade will be the U.S. taxpayer.
This new Public Citizen paper spells out just how much Oracle and the rest of America’s most generous-to-CEO corporations are saving off their taxes thanks to a 1993 loophole that lets corporations deduct however much they compensate their top executives in “performance-based pay.”
This loophole, Public Citizen details, will save U.S. corporations as much as $235 million off their taxes on last year’s 20 highest-paid CEOs alone.
The fix for this outrage? Public Citizen has one: passage of legislation newly introduced by senators Jack Reed and Richard Blumenthal, the Stop Subsidizing Multi-Million Dollar Corporate Bonuses Act. Their bill would simply deny all U.S. firms any deductions for annual pay that runs over $1 million per executive.
** This post via Adam Crowther, Thanks a Billion (or So): A Small Loophole Inserted 20 Years Ago Helps Companies Avoid Paying the U.S. Treasury Big Money, Public Citizen, Washington, D.C., November 12, 2013 via www.TooMuchOnline.org