Integrity concerns over E&Y tax scheme
Non-executives of US telco Sprint have pressured its two executives to step down over a tax scheme that was advised by Ernst & Young.
The tax shelter to protect share option gains is not deemed improper and E&Y stands by it. But the US Inland Revenue Service has started a court case to investigate the tax arrangement of Sprint chief executive William Esrey and chief operating officer Ron LeMay, according to a report in the Financial Times
The outbreak of corporate scandals has reduced board tolerance on the integrity of executives, and they now clamp down on practices they used to ignore. Some industry consultants have warned that ‘good executives’ could be ousted for using legitimate tax practices.