Question: Global Corporation is looking for a new CEO. The board of directors selected Miguel as the top candidate. During negotiations, Miguel indicated he wanted a

Global Corporation is looking for a new CEO. The board of directors selected Miguel as the top candidate. During negotiations, Miguel indicated he wanted a $2 million salary in addition to the stock-based compensation the board was offering. Although this salary level could be considered reasonable, the board was concerned about the $1 million limitation on deductible salary. The board proposed an alternative under which Miguel would be paid a $1 million salary and also offered him an additional $1.25 million bonus, contingent on meeting realistic performance goals. Miguel is confident he can meet these goals. Global Corporation is in the 35 percent marginal tax bracket. Which alternative is better for Miguel and which is better from the corporation's perspective?

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