The Republican tax plan proposes to eliminate a decades-old rulethat’s been blamed for fueling the meteoric rise of executive compensation at U.S.companies, and could upend popular retirement-savings programs usedby scores of high-placed corporate leaders.

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Under current law, businesses can write off as much as $1million in compensation expenses for chief executive officers andfour other top-paid bosses, plus any amount beyond that if it’stied to performance targets. The Republicanproposal unveiled Thursday would keep the $1 million thresholdbut eliminate the exemption for pay linked to results, denyingcompanies the option to write off large equity awards.

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Related: Pay data reporting rule rolled back by WhiteHouse

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A repeal of the exemption for performance-linked pay would tweakformer President Bill Clinton’s much-ridiculed attempt to curbspiraling executive paychecks through legislation, often blamed forhaving the opposite effect. While paying top bosses would get moreexpensive, the change likely will have “minimal to zero effect” oncompensation levels, said Ian Levin, a partner at law firm SchulteRoth & Zabel.

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“It’s sort of throwing out the baby with the bath water,” Levinsaid about the new rule, which lawmakers estimate will boostgovernment revenue by $9.3 billion over a decade. “I would havethought you’d scrap it altogether and put something better inplace.”

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Businesses can generally deduct employee compensation expensesfrom their taxable income. The Clinton administration’s rule,enacted in 1993 and tucked into Section 162(m) of the U.S. taxcode, set the write-off threshold. The exception was made for paytied to performance, based on the idea that leaders should berewarded only if their companies and shareholders also do well.

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The rule had unintended consequences. It established a salary ofat least $1 million as a benchmark for CEOs at major publiccompanies, and prompted boards to make stock options and restrictedshares key ingredients of executive pay. About 57 percent ofS&P 500 chief executives have salaries of more than $1 million,according to data compiled by Bloomberg.

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Average reported compensation for CEOs in the index rose to $9.1million from $3.7 million in the first decade after the law waspassed, according to a 2005 Harvard Law School study. In 2016, theaverage had risen to $14.6 million, according to the Bloomberg PayIndex, which values compensation as of a company’s fiscal year-end,not the day it’s granted. The figures can therefore differ fromwhat appears in regulatory filings.

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The Republican plan could also drastically change the use ofso-called non-qualified deferred compensation plans, whichfunction as super-sized 401(k) plans for executives at hundreds ofU.S. companies.

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Under current law, participants can contribute salary and otherawards to the plans free of taxes, invest the money and defer taxpayments until years later when it’s withdrawn.

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The bill calls for contributions to be taxed as soon as themoney is at “no substantial risk of forfeiture,” potentiallymeaning as soon as any vesting restrictions lapse. Salaries andbonuses that come without vesting hurdles will therefore get taxedright away. That leaves executives without the benefit of beingtaxed later in life, when they’re likely past their top-earningyears and would fall in a lower tax bracket.

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The change could eliminate all voluntary contributions byexecutives to deferred compensation plans, said Heidi O’Brien, apartner in the executive-rewards practice at consulting firmMercer. It’s estimated to raise $16.2 billion over a decade.

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It’ll apply to new amounts earned and deferred after 2017, whileexisting balances will be subject to the new rule by 2026. Manycompanies will likely start phasing out their plans before then,according to Mike Francese, a partner in the employee benefits andexecutive compensation group at Covington & Burling.

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About 360 companies in the S&P 500 have such plans in placefor executives, according to data from Equilar Inc. They provideleaders another option to save for retirement, which mightencourage them to remain on the job. Some also believe they helpexecutives keep a long-term focus since the plans are unfunded andpayouts come straight from the company’s coffers.

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