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MSNBC: The employment contracts became so complex, with pay packages consisting of stock options and other forms of deferred compensation, largely because of Congress' attempts to control soaring executive salaries. In 1993, Congress limited the tax deduction companies could take for cash payments to $1 million. The result was a cottage industry of lawyers, consultants and advisors who structure even bigger pay packages with creative legal strategies that now make the AIG bonuses difficult to rescind.
“Before Congress got involved we used to give them a $2 million salary and a corporate jet,” said Lynn Stout, a UCLA professor who specializes in corporate governance and securities regulation. “And it was much cheaper and safer.” There's more.
