Cardinal Health “just says no” to discrimination!
As footnoted regulars know, we think tax gross-ups are pretty gross. If you happen to get a huge chunk of change by exercising options or selling the company, you ought to be able to afford competent tax and legal advice to help minimize your tax burden. However, we had no idea that the lack of a gross-up was considered discrimination, at least in certain circles.
Yet, that’s exactly how Cardinal Health (CAH) explained its policy for providing gross-ups in the CD&A for the preliminary proxy it filed last night, claiming discrimination not just once, but twice:
The excise tax imposes discriminatory results between executives with varying compensation and stock option exercise histories; the gross-up provisions assure that the financial incentives provided by the employment agreements will have the desired effect upon the executive officers without discriminatory results
We’ll go out on a limb here, but we don’t expect the EEOC to take up this cause.