Bill Bennett: “I made reference, in my colloquy with the Senator from Delaware, to the decision that was made by the Congress back in…”

“I made reference, in my colloquy with the Senator from Delaware, to the decision that was made by the Congress back in 1993 to put a limit on the amount of compensation that executives could receive in terms of traditional dollar salary. And the limit was $1 million. I remember some of the rhetoric that flew around this floor at that time, filled this Chamber--how terrible it was that people were being paid these outlandish salaries and that somehow it would benefit the people at the bottom of our economic ladder if there was a limit placed on those salaries. And so recognizing that they could not outlaw the salaries, Congress could do the next best thing--or, if I might say, the next worst thing--and say: All right, they can pay themselves these big salaries, but, by George, we will not allow a tax deduction for anything over $1 million. Then, recognizing that would probably produce all kinds of difficulty, Congress said: Except in a number of areas. And one of the areas of exceptions was that nonsalary compensation could exceed $1 million and be expensed if it were approved by the shareholders. In my view, this was a strong incentive to move towards stock options.…”