The base salary for executive pay is normally stated as an annual salary, although it is typically paid monthly or bi-weekly, similar to other salaried staff.
The pay for the Chief Executive Officer (CEO) for S&P 500 companies ranges widely, depending on the company, the industry and the tenure of the executive. However, since 1993, federal tax law has limited to $1 million the amount of cash compensation that companies can deduct as an expense for tax calculations. Under the 1993 law there was an exception to the $1 million cap on deductibility for certain compensation that is “performance-based” as designated by the statute. The performance-based exception was repealed under the 2017 Tax Cuts and Jobs Act and now compensation for the CEO, CFO and the three other highest paid executives is capped at $1 million regardless of whether compensation is performance-based or not, with transition rules for binding contracts in effect on or before November 2, 2017. The 2017 changes also provide that once an executive is covered under the provisions of Section 162(m) he or she will be subject to the $1 million cap for all payments received for the remainder of tenure with the company and applies to payments made after termination and retirement.