MN’s compensation package for its CEO consisted of a $600,000 salary plus $200,000 unfunded deferred compensation. The CEO will receive the $200,000 when he re-tires in 2020. He is also a participant in MN’s qualified pension plan. MN contributed $21,000 to fund a $90,000 annual pension that the CEO will begin to receive in 2020.
a. Compute MN’s financial statement expense for the CEO’s compensation.
b. Compute MN’s tax deduction for the CEO’s compensation.
c. Compute the CEO’s taxable compensation income.
d. How much taxable income will the CEO recognize in 2020?

  • CreatedNovember 03, 2015
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