PRESS RELEASE
WASHINGTON, D.C. — U.S. Senator Kirsten Gillibrand today introduced an amendment to the banking deregulation bill to close a tax loophole that forces taxpayers to subsidize massive CEO compensation. Gillibrand’s amendment would put taxpayers first by closing the tax loophole that allows corporations to deduct part of the amount they spend on executive compensation. Gillibrand’s amendment would also give shareholders more oversight in determining whether CEOs should receive substantial raises or bonuses. Under the current law, corporations can get a tax deduction for excessive CEO pay and pay their CEOs massive amounts of money with little input from shareholders.
“From corporate tax cuts to banking deregulation, Congress is making sure the biggest banks are winning and their CEOs are getting big paydays, but not doing nearly enough to help working families in New York and across the country,” said Senator Gillibrand. “In order to make the system fairer for taxpayers, we should start by making sure they aren’t subsidizing the excessive compensation these CEOs are receiving – in some cases more than 300 times higher than their employees. This is unacceptable, which is why I urge all of my colleagues to support my amendment. We need to start rewarding work again in this country, and ending taxpayer subsidies of excessive CEO pay is a good start.”
Specifically, Gillibrand’s amendment would do the following:
Close the executive compensation loophole by eliminating a company’s tax deduction on executive compensation that is “excessive,” defined in this legislation as more than 25 times the median income of their employees or more than $1 million, whichever is less;
Require that a public company may only pay “excessive” amounts if a majority of shareholders vote to approve the compensation within 18 months of the compensation being paid; and
Require that if a company does not receive the majority vote, the Securities and Exchange Commission can issue a non-tax-deductible fine for the amount of excessive compensation.
