To many investors and shareholder activists, tax gross-ups are an element of CEO compensation just about as offensive as the name sounds. Still, they don’t seem to be going away.
Such are the findings of the Corporate Library, which studies the compensation disclosures of nearly 3,300 companies that filed proxy statements from February 2007 to February 2008. Forty-two percent of those companies gave their CEOs gross-up payments, which are used to cover the 20 percent excise tax that applies to golden parachute payments that exceed the limit imposed by the federal tax code.
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