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How long will politicians look the other way on CEO pay?

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Anderson hopes that a new research finding in this year's report, along with a new president in the White House and a possible swing toward more Democrats in Congress, will bring about some legislative action on executive pay.

What the 2008 report finds is that five tax and accounting loopholes encourage excessive pay by allowing CEOs to avoid "their fair shares of taxes." In effect, ordinary US taxpayers are subsidizing the earnings of executives by at least $20 billion.

"Outrageous … it's a real cost to society," says Anderson. That's a big enough amount to subsidize 130,000 affordable housing units, she figures.

For that matter, it would pay for the Iraq war for about a month and a half.

One tax loophole gives preferential treatment to "carried interest" at a cost of $2.66 billion to Uncle Sam, according to the Joint Committee on Taxation.

To explain, in a publicly traded corporation, a CEO pay package typically includes salary, bonus, perks, and stock awards of various sorts. At private investment funds and hedge funds, managers get paid by taking an annual management fee, usually 2 percent of the capital they oversee, and by taking a larger chunk, usually 20 percent, of profits realized when they sell fund assets. The latter is termed "carried interest."

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