Tax Experts Recommend Changes to Perks After Enron Probe

WASHINGTON -- Tax experts urged Congress to ban certain executive compensation tools such as those used at Enron, particularly one that allows executives to defer stock gains in order to avoid tax payments, Agence France Presse reported Tuesday.

In a hearing before the Senate Finance Committee Tuesday, the bipartisan Joint Committee on Taxation said the use of programs such as Enron's deferral of stock options gains and restricted stock programs "should not be allowed."

The congressional tax experts made a series of recommendations to lawmakers, who are due to draw up new legislation which is likely to reform some aspects of executive compensation after uncovering how Enron executives drew millions of dollars in such plans as the company spiraled into bankruptcy.

Lawmakers on the committee also critically questioned an executive from the Towers Perrin executive compensation consulting firm, used by Enron to help determine executive benefits, on why Towers Perrin supported some of the arcane schemes that ultimately enriched some Enron executives as many employees lost significant benefits.

-- NYSSCPA.org News Staff

Posted on 04/9/03