>Maybe he does. But if he has a billion dollars in stock and his being CEO caused the company to grow 6% a year instead of 4% under some other CEO, being CEO that year earned him an extra twenty million dollars.
I agree in this case you would have "earned" 20 million dollars or whatever by being CEO, but I disagree with equating this to regular income (and therefore worthy as labeling it a "loophole"). Let's push this to the extreme. If you owned a bunch of stocks in a company, and believed voting for a particular board chair would cause the company to grow 6% a year instead of 4%, does that also mean you "earned" $20 million dollars, and exploited a "loopphole" to avoid paying regular income taxes on it?
>But it does, because a salary would be taxed at the ordinary income rate. Effectively zeroing it out avoids that.
Right, but your "income" is composed of two parts:
1. your salary
2. whatever capital gains you stand to earn
Regardless of what the company paid you for your salary, you still stand to gain from the capital gains. The capital gain is where all the "loopholes" what we discussed are (ie. taxes being due only when you sell, being able to borrow against it). Regardless of whether you got paid $1M or $1 salary, you still benefit from the capital gains, and the tax loopholes on those gains. I suppose not having a salary will allow your tax return to show $0 owing rather than $xxx,xxx or whatever, but that's not really an accurate depiction of what the loophole is. Besides, I'm sure that bezos/jobs has other other stocks that pay dividends which are taxed immediately, and so his tax owing will never be $0.