But not Robert Nardelli, the home-improvement retailer's chief executive. Under his employment contract, Home Depot picks up a big chunk of his federal and state income taxes. Specifically, the company is obliged to reimburse its CEO for taxes due on a slew of perks, including a high-end luxury car, his family's travel on Home Depot jets and forgiveness of a $10 million loan. Last year, these payments amounted to at least $3.3 million, topping Mr. Nardelli's $2 million base salary.

Amid soaring CEO compensation, a number of companies are paying extra sums to cover executives' personal tax bills. Many companies are paying taxes due on core elements of executive pay, such as stock grants, signing bonuses and severance packages. Others are reimbursing taxes on corporate perquisites, which are treated as income by the Internal Revenue Service. They run the gamut from personal travel aboard corporate jets to country-club memberships and shopping excursions.

"This smacks of Leona Helmsley-like treatment, that only little people pay taxes," says Patrick McGurn, an executive vice president of Institutional Shareholder Services Inc., an influential adviser to big investors that often critiques companies' corporate-governance practices. For these top executives, he says, companies "are removing taxes from the list of inevitable life experiences, leaving only death."

Companies often don't disclose these perks, the Journal reports -- they often bury them in financial filings. According to a study cited by the paper, 52% of companies disclosed they paid gross-ups to one or more top executives last year, up from 38% in 2000.

Some examples of companies paying top executives' taxes:

Coca-Cola Bottling Co. Chief Executive J. Frank Harrison III has received more than $4 million since 2000 to cover taxes on a big restricted-stock grant. That's more than his total salary over the same period.

Federated Department Stores Inc., which owns Macy's and Bloomingdale's, compensates executives for taxes due on big merchandise discounts at company stories. The corporation said in a filing that the discounts and related tax gross-ups totaled about $300,000 for its top executives in 2004.

North Fork Bancorp., in what appears to be one of the richest gross-up plans around, could pay more than $125 million in tax reimbursements to top executives if the Long Island-based bank is ever acquired.

The bottom line, the Journal says: "Tax gross-ups have proliferated for one major reason, many compensation experts say: They allow companies to quietly pay more to top managers at a time when executive compensation is increasingly controversial. The current rules don't require companies to disclose tax reimbursements separately in pay tables given to shareholders."