Close the Loophole in Section 162(m) That Forces Taxpayers to Subsidize CEO Bonuses!

  • by: Freya Harris
  • recipient: US Congress and President of the United States

Section 162(m) was a well-intentioned effort by Bill Clinton to rein in executive pay by capping tax deductions for CEO salaries at $1 million. There’s a loophole in the language, however, that allows exemptions for stock options or any other pay that is considered “performance-based,” and that loophole has lead to explosive growth in various stock options and bonus payouts for executives—all subsidized by taxpayers. In effect, Section 162(m) created a legal process by which publicly held companies can lower their tax bills by boosting CEO pay, leaving taxpayers on the hook for the lavish salaries of corporate titans.

This is unacceptable, especially when schools, public transit, infrastructure repairs, public aid, and many other programs are starved for money. We need to rein in the obscene pay of CEOs and ease the tax burden on the working class.

We the undersigned are outraged that Section 162(m), an attempt to rein in bloated CEO pay, allows exemptions for stock options or any other pay that is considered "performance-based." This loophole has lead to explosive growth in various stock options and bonus payouts for executives, all subsidized by taxpayers. We demand that this loophole be closed completely.


The rich get entirely too many tax breaks, leading to not only a greater tax burden on the already strained working class, but also less money for schools, infrastructure maintenance, police and fire departments, public assistance, libraries, et cetera. Executives of big companies in the United States receive salaries that are as much as 700 times that of the rank-and-file employees who are the true lifeblood of business. Write, sponsor and pass legislation that will end the exemption for "performance-based" bonuses.

Sign Petition
Sign Petition
You have JavaScript disabled. Without it, our site might not function properly.

See our privacy policy.

By signing, you accept Care2's terms of service and agree to receive communications about our campaigns through email and other methods. You can unsub at any time here.

Having problems signing this? Let us know.