New Executive Compensation Tax Rules?

Reporters Charles Forelle and Kara Scannell ("Revisiting Executive-Pay Law") in today's Wall Street Journal  write that Congress is looking to amend the 1993 provision that caps business expense deductions for executive compensation at $1 million to eliminate the performance-based compensation exemption, used primarily on "at the money" compensatory stock options.  Since the $1 million cap is below market for most companies, it would increase taxes paid by most corporations.  Most doubt it would affect overall levels of compensation however.  It would limit a common public justification for stock options and could affect the composition of compensation packages, however.  A complete overhaul of the tax rules on stock options needs to include the qualified option rules that give individual tax preferences to "qualified" at the money option programs for employees and discourage indexed and other forms of options and restricted stock grants.