The "Gift Trust Agreement" the Cheney's signed two days before he took office turns over power of attorney to a trust administrator to sell the options at some future time and to give the after-tax profits to three charities. The agreement specifies that 40% will go to the University of Wyoming (Cheney's home state), 40% will go to George Washington University's medical faculty to be used for tax-exempt charitable purposes, and 20% will go to Capital Partners for Education, a charity that provides financial aid for low-income students in Washington, DC to attend private and religious schools.
The agreement states that it is "irrevocable and may not be terminated, waived or amended," so the Cheney's can't take back their options later
FactCheck.org: Kerry Ad Falsely Accuses Cheney on Halliburton
Maybe this will help, the conversation somewhat when it comes to the former Vice Presidents compensation from Haliburton. It appears that most if not all of the option profits were given to charity according to this agreement. That leaves his salary most of the 2 million of which was paid prior to his entry into the office. So that leaves around 400K paid to him as Deferred compensation while he was in office. Just something to help clear up the salary issue.
And the tax consequences? 400k is peanuts to Cheney, true.
It would seem to me that if it were paid to him in the form of salary , not only would he have to declare it on his tax return but also, much like any other compensation it is subject to being taxed both at the Federal and State level. I cannot tell you for sure exactly how much as I don't have the former Vice Presidents return in front of me , and I am not sure I would want it *laughs*