Highly compensated executives sometimes prefer fringe benefits such as club memberships,company cars,and more vacation time,as opposed to higher salaries because most often these benefits are not taxable income.
Highly compensated executives that pay a higher percentage of their salary in taxes sometimes prefer to receive added fringe benefits rather than higher pay.

Question

Quizplus · Accepted Answer

This statement is true because fringe benefits such as club memberships, company cars, and more vacation time are not subject to income tax, whereas higher salaries are. Therefore, receiving these benefits can provide a tax advantage for highly compensated executives who may be paying a higher percentage of their salary in taxes.

Highly Compensated Executives Sometimes Prefer Fringe Benefits Such as Club