David Larcker, a professor of accounting at the Stanford Graduate School of Business, was quoted in the WSJ about CFO compensation as saying, “It would be very surprising if their performance evaluations weren’t heavily weighted to minimizing corporate taxes. That’s their job.”
Does this seems off to anyone as a way to evaluate and incentivize an accountant? It seems to me like this assumption of ‘job’ contributes to the disconnect between tax revenue and its purposes.
Yes, of course, a CFO should manage expenses and tax payments to pay the right amount, but what tax rate a company paid (if in compliance) shouldn’t even be considered as an incentive metric, should it?
Does this seems off to anyone as a way to evaluate and incentivize an accountant? It seems to me like this assumption of ‘job’ contributes to the disconnect between tax revenue and its purposes.
Yes, of course, a CFO should manage expenses and tax payments to pay the right amount, but what tax rate a company paid (if in compliance) shouldn’t even be considered as an incentive metric, should it?