Concurrent Resolution on the Budget, Fiscal Year 2016

Floor Speech

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Mr. REED. Mr. President, this amendment is based on legislation Senator Blumenthal and I introduced last Congress to close a major loophole in the current corporate tax law by putting an end to unlimited tax write-offs for performance-based executive pay. In 1993, Congress limited the deductibility of executive pay to $1 million, with an exception for performance-based compensation. But over the last two decades, corporations have made the exception the rule, and we have seen more pay designated as performance based even in some cases where the company is not doing very well for the shareholders.

It has been estimated that between 2007 and 2010, $121.5 billion in executive pay was deductible, and roughly 55 percent of that was for performance-based compensation. Businesses and shareholders should establish the pay of their officers and employees, but the taxpayers should not be subsidizing excessive pay at corporations. I urge a ``yes'' vote. It will save more than $50 billion over 10 years.

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