What is a gross tax?
Hrubby or simply, gross UP-up, is compensation for paid employees, except for its salary, covering the tax liability for perquisites or "benefits". Perquisites may include the use of a company or aircraft, the cost of moving, renting, membership and insurance. Since the internal income service (IRS) has seen, employees who receive benefits must pay taxes on the real market value of the goods or services. For example, in 2004, Home Depot gave the outgoing CEO Robert Nardelli another $ 3.3 million in the US (USD) to take care of his personal taxes from various perquizits. In the case of Nardell, this included the forgiveness of personal debt and family travel on the corporate aircraft.
began in the 80s of the 20th century, tax gross grew after the Singighest States Congress imposed 20 % excise duty, on top of normal income tax, on severance pay leadingworkers who merged or sold their companies. Exclusing tax pays when the severance pay exceeds the amount that has been three times the average earnings in the last five years. Standard severance pays are usually three times the salary and bonus and limited shares and outstanding options immediately lead, so the potential tax law makes it extremely expensive. Companies can pay millions of gross taxes to give employees only a few hundred thousand dollars for the next severance pay. Gross tax can be the most expensive part of the golden parachute for society.
tax gross assignment claims that tax reimbursement is an effective mechanism for the charge, hiring and maintaining experienced executives. Another advantage is that executives are able to hold more their own shares in their companies if they do not have to pay taxes on a restricted stock. Managers who have increased capital are most likely to align their goals with the goal of shareholders. Opponents of tax gross establishedOutline suggests that companies use this tool to strengthen powerful compensation and at the same time hide this fact from shareholders. Gross tax on tax can be ineffective use of shareholders' funds.
Before 2006, Perquisites had to be included in the summary compensatory table of the annual proxy statement only if the total value of Perquisite exceeded 10 percent of the total annual salary and employee bonus or $ 50,000. In addition, specific details of gross tax or any other perk only had to be determined in a separate summary only if it exceeded 25 percent of the total benefits for this employee. After the financial disasters of Tyco, Worldcom and Enron, SEC issued new regulations "Executive compensation and publication of the related party", which applied to the statement of proxy filed after December 15, 2006. The threshold for Discloresore dropped from $ 50,000 to $ 10,000 for aggregated perquisites with detailed publishingIt esterates $ 25,000 or accounts for 10 percent of total benefits for employees.
Using the proxy's data, the Fortune 500 statement is the tax gross expiry of the most commonly used perquisite. Among the 2006 proxy statements received 755 gross tax executives, with a median grossly approximately $ 34,000. Although tax reimbursement is the most commonly employed perk, it is not the most exaggerated. For example, during 2006, Fortune 500 provided the company as an advantage for 432 aircraft executives or corporate current, with an average perk value of $ 82.203. However, shareholder and media criticism over excessive payout packages, including bonuses and benefits, has made a gross tax implementation a controversial problem.