CONGRESS EYES STOCK OPTIONSWASHINGTON - After months of increasing reports of investigations by both the Securities and Exchange Commission and academics, Congress is now examining the sometimes-questionable timing of stock options granted to executives, considering reducing or eliminating a deduction that encourages companies to award executives options.
SEC Chairman Christopher Cox expressed support for the idea in testimony before the Senate Banking Committee. Companies are required to pay taxes on compensation that exceeds $1 million a year received by each executive. However, there is an exception for pay tied to a company's financial performance, which can be deducted, and which authorities believe has led to companies doling out stock options. Cox described that $1 million threshold as an unworkable price control.
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