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Making Cents: A Little Justice After All

April 21, 1996

Some top executives get "golden parachutes" when they are fired--huge lump-sum payments. But shareholders and lower-level victims of downsizing might be interested to know that if the payment amounts to more than three times earnings, the payments can cost the company--and the executive--dearly. Any amount over that threshold is hit with an extra 20% federal excise tax. And companies cannot deduct the "excess" payments as a cost of business.

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