The Hightower Report

A CEO Perk for Perks; Why Not 'Drink Local'?

A CEO PERK FOR CEO PERKS

You know what really gets me PO'd? Having to pay taxes on the free personal trips that I take on my company's corporate jet.

Oh ... wait. We don't have a corporate jet. Still, I empathize – as I'm sure you do – with fat-cat CEOs of big corporations who are happy to get free personal use of the company airplane but are furious that they then have to pay taxes on the value of the rides they take. Our "intrusive" government, you see, counts free jet rides, company-paid country-club dues, and other executive perks as extra compensation, which, therefore, is taxable.

Luckily, however, America's clever CEO class has found some suckers to whom they can pass this unwelcome tax tab: shareholders. Top corporate executives have devised a new perk for themselves with the appropriate name of "gross-up." What it means is that the company – i.e., the rank-and-file shareholders – pays the taxes that the honchos owe on their freebies. It's a perk for receiving perks. See, in CEO land, you can have your cake and eat it, too!

Never mind that CEOs of major corporations now average some $15 million each in yearly pay. With that kind of cash, you'd think they could spring for their own tickets to Aspen or Paris or at least cover their own income-tax obligations for receiving the free trip.

But, no, these are the pampered princes of modern commerce, so the rules of personal responsibility don't apply to them. A study by a watchdog group called the Corporate Library finds that 20% of the chieftains of major corporations are now taxing their shareholders for this gross-up perk.

For more information on the fun and games that CEOs play on shareholders, taxpayers, workers, and others, check with the Corporate Library: www.thecorporatelibrary.com.

WHY NOT 'DRINK LOCAL'?

In a triumph of marketing over reasoning, the bottled-water industry has turned us into conspicuously silly consumers.

Controlled by a handful of global conglomerates (such as Coca-Cola and Nestlé), the water industry has created the fantasy that if it's in a bottle, it's purer than what comes out of the tap. But wait – the Environmental Protection Agency stringently regulates the public water systems, requiring tests several times a day for bacteria and other contaminants, and these test results are public information. The corporate bottlers, on the other hand, are overseen by the more lackadaisical U.S. Food and Drug Administration, which requires them to test their water sources only once a week – and the results are kept secret by the corporations.

One group that is beginning to rebel is one you might not expect: upscale restaurants. Such places profit handsomely from offering Perrier, San Pellegrino, Fiji, or other designer waters, paying a dollar or 2 for each bottle and selling them for 8 or 10 bucks. Yet, Chez Panisse in Berkeley, Calif., and Del Posto in New York City are among the pioneers who are foregoing this profit center, substituting free filtered tap water or house-made sparkling water that's also drawn from the tap.

Why would they do this? Because they are part of a growing sustainable-food movement that prides itself in using local, seasonal ingredients for their menu items. Think about it: In terms of energy, environment, and sustainability, it makes no sense to load cargo ships with millions of bottles of water, haul them thousands of miles to our shores, truck them hundreds of miles to our restaurants, then chuck the bottles into our overloaded landfills – when the local, public water system supplies perfectly good water available at the turn of a faucet.

Just as it makes economic and environmental sense to "eat local," it also makes sense to "drink local."

For more information on Jim Hightower's work – and to subscribe to his award-winning monthly newsletter, The Hightower Lowdown – visit www.jimhightower.com. You can hear his radio commentaries on KOOP Radio, 91.7FM, weekdays at 10:58am and 12:58pm.

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KEYWORDS FOR THIS STORY

gross-ups, corporations, gross-up, Corporate Library, bottled water, Environmental Protection Agency, U.S. Food and Drug Administration, tap water, Chez Panisse, Del Posto

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