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The Enron Wage Gap Fix
Enron's Jeff Skilling was sentenced today to over 24 years in prison, and ordered to pay $45 million in restitution.
We may have hit upon the fix for the growing wage gap. Maybe if we invested in corporate crime fighting, we could rack up some nice restitution orders and send that money along to employees, pension funds and 401(k) plans.
It might not make up for all the money CEOs with compliant boards decided to pay themselves (instead of retaining workers, lowering prices or rewarding investors). But it's a start!
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FASB and SEC Mull Exec Pay Accounting Changes
America's accounting chiefs are close to deciding that salary and perks exceeding two million dollars annually can not rationally be deemed pay for work expended. Payouts of five million to hundreds of millions would quite boggle the minds of both Adam Smith and Karl Marx, said one insider, "off, off, off the record."
Going forward the recommendation will be that executive remuneration exceeding two mil annually will be construed as a disbursement of corporate capital in amounts agreed to by boards, directors, trustees and not so trust-ees as the case may be.
The new accounting will reflect that mega salaries in excess of the maximum two mil will be considered as an allocation of corporate capital which will no longer qualify for accounting treatment as a corporate expense.
A number of CEO's have formed a study committee particularly in response to the IRS position of "You can call it capital or you can call it Swiss cheese, we're still taxing exec' pay at the highest personal rate possible."
"There's a fundamental lack of fairness here, whinged" the corporate CEO's, further arguing, “even embezzlement is treated as a deductible expense.”
Shareholders, mostly wearing Abu Ghraib style hooding to protect their identities, were cautiously pessimistic.
October 24, 2006 2:15 PM | Reply | Permalink