A taxing disclosure at Fortune Brands …

It’s a rare day when corporate America cites the Internal Revenue Service as a bastion of restraint and sober perspective — especially when it comes to personal income.

Yet there on page 35 of the proxy filed by consumer-products conglomerate Fortune Brands Inc. (FO) is a table laying out the Form W-2 Box 1 income for its top five officers. “We are providing this supplemental table,” the proxy notes, “to highlight the difference between compensation reported under the SEC rules and compensation amounts realized and reports as taxable income on Forms W-2.”

Just how big are those differences? For Bruce A. Carbonari — chairman and chief executive of the company that markets Jim Beam bourbon, Titleist golf balls and Master Lock padlocks — it comes to as much as $9.5 million in 2009, with SEC-reported total compensation of $10.7 million and IRS reported “wages, tips and other compensation” of $1.3 million. For Craig P. Omtvedt, senior vice-president and chief financial officer, there’s a $3.9 million gap.

Of course, in many ways, the comparison is apples and oranges. The IRS looks at what taxpayers actually collect in a year, and Fortune Brands’ executives, like most, get a lot of pay that won’t necessarily land in their pockets for months or years. Cabonari’s compensation last year included $6 million in stock awards and $1.5 million in stock options, valued under SEC reporting rules, as well as $432,468 in gains on pension and deferred-comp plans. Stock options are generally taxed when exercised, and pension and other deferred compensation aren’t usually taxed until they are paid out.

One factor at Fortune Brands may actually have pushed up the taxable income some executives reported: paying out certain retirement benefits in advance, into trusts set up for the executives’ exclusive benefit. Ordinarily, executive pensions are merely IOUs from the company to the individual, payable at retirement. But that leaves executives at risk of losing their pensionsif the company fails — they have to get in line like other creditors in bankruptcy. The special trusts for some of Fortune’s top officers protect them against that, at the expense of paying taxes now instead of later. To ease that burden, Fortune Brands grosses up the payments to cover taxes on the trusts’ earnings each year — some $29,846 in 2009.

We’ll just have to wait and see whether other companies begin pointing to IRS pay figures to contrast with the SEC’s disclosure rules. In the meantime, we’re pretty sure Carbonari and his colleagues got some value out of the pay that hasn’t yet appeared on their W-2s.

<em>Image source: adonis hunter / ahptical via Flickr