Many Americans believed excessive executive pay to be a reason for job lay-offs over the previous decade. It comes as no surprise then that many candidates, both republican and democrat, spoke out against high executive pay. As the campaign evolved, Bill Clinton expressed his plan to limit the corporate tax deductibility of excessive CEO pay, excessive being an income over $1 million. Clinton frequently expressed the view that pay needed to be tied to performance. Nonetheless, in the early days of the Clinton administration, when reports of his intention to exempt all “performance-based pay” from the deductibility cap were released, some perceived him to be flip-flopping on the issue to gain support (Lublin 1993). Due to worry about the loss of deductibility, we saw people rushing to exercise their stock options before the end of the 1992 calendar year. Some big public firms even announced consideration to return to private ownership. In April of 1993 following Clinton’s presidential victory, the administration submitted its proposal to Congress and the provisions, which for the most part remained unchanged, were included in the Omnibus Budget Reconciliation Act of 1993. Of these provisions, the ones relating to executive compensation are codified in section
Many Americans believed excessive executive pay to be a reason for job lay-offs over the previous decade. It comes as no surprise then that many candidates, both republican and democrat, spoke out against high executive pay. As the campaign evolved, Bill Clinton expressed his plan to limit the corporate tax deductibility of excessive CEO pay, excessive being an income over $1 million. Clinton frequently expressed the view that pay needed to be tied to performance. Nonetheless, in the early days of the Clinton administration, when reports of his intention to exempt all “performance-based pay” from the deductibility cap were released, some perceived him to be flip-flopping on the issue to gain support (Lublin 1993). Due to worry about the loss of deductibility, we saw people rushing to exercise their stock options before the end of the 1992 calendar year. Some big public firms even announced consideration to return to private ownership. In April of 1993 following Clinton’s presidential victory, the administration submitted its proposal to Congress and the provisions, which for the most part remained unchanged, were included in the Omnibus Budget Reconciliation Act of 1993. Of these provisions, the ones relating to executive compensation are codified in section