Companies can no longer deduct executive pay over $1 million for tax purposes

The US Treasury Department is proposing new rules that limit how much executive pay companies can deduct from their taxes. This means publicly traded companies will pay more in taxes if they pay their top executives more than $1 million a year.

For years, companies could deduct executive pay over $1 million if it was tied to performance. This allowed them to lower their tax bill while still paying executives large bonuses. The new rules close that loophole, making it more expensive for companies to pay their highest earners.