Yea, that was me.
Issue - Tax Code §162(m) - Deductibility of Executive Compensation
Section 162(m) of the tax code limits the amount of deductible compensation that a company can pay to the CEO and top…
Basically, you can’t deduct comp in excess of 1M. So, this incents corporations to use performance based (usually stock options) incentives to comp their execs.
The result of this has been, over time, the establishment of 1M as kind of a defacto base salary for large corporations. The rest of it generally comes from a pool of stock authorized by the shareholders (which dilutes their own holdings) for the purpose of compensation.
So, as weird as it is to see how much those guys (and gals) make…….it doesn’t come out of the bank account used for to pay everyone else.