Still obsessing over bonuses and the taxation thereof? Adam Gurri boils down the pertinent section of the Internal Revenue Code:
Corporations that pay their executives more than $1,000,000 in salary do not receive particular tax deductions associated with business expenses. But, corporations that pay their executives more than $1,000,000 in performance-based compensation (read: bonuses) will receive those tax deductions.
Obviously I’m not the guy who defines “performance” that’s up to the board of directors but it seems pretty clear to me that Congress opened this can of worms, inasmuch as they’re to blame for the tax code in the first place, and as usual (see Zymurgy) they’re failing to recan the critters properly.