He said he didn’t expect companies to change pay packages unless Camp’s plan gains momentum in Congress. If and when that happens, the changes would be significant.
Cash Bonus
“The one thing you know is that a regular annual cash bonus, that works,” Trevino said. “That is least affected by this. But long-term deferred compensation structures like the ones that are being proposed for financial institutions around the globe, those would need to be evaluated in light of these tax changes.”
Companies will pay what they need to in order to attract talent, and they’ll just pass along the costs to customers, said Espen Eckbo, a professor of finance at Dartmouth’s Tuck School of Business and director of Tuck’s Lindenauer Center for Corporate Governance.
“If you try to press a balloon, it’s going to pop out at the other end,” he said. “And that’s what’s going to happen with this proposal on executive pay.”