NEW YORK (CNNMoney.com) -- A leading senator says Congress is looking at reducing or even eliminating a lucrative tax deduction that make companies more likely to grant stock options, according to a published report.

The Wall Street Journal quotes Sen. Charles Grassley, R-Iowa, the chairman of the Senate Finance Committee, as saying it may be time to eliminate or at least "tighten up" the 1993 law that allowed for tax deduction for executive pay of more than $1 million as long as it was tied to performance.

Grassley told the newspaper that the 1993 law had "failed and to some extent it might be creating this options industry."

While Grassley did not detail what changes might be considered, he told the paper "a lot of members are interested" in possibly scaling back executive-pay deductions.

He also predicted any change likely would come as part of a larger tax bill in a future year, though he said there's the possibility that changes could be made in a "lame duck" period after the November elections, before the newly elected Congress takes office in January.

The paper reports that any proposed change to the tax law regarding options likely would draw strong opposition from business groups, but that the sometimes-broad gulf between CEO pay and corporate performance, along with the options scandal, has stirred interest on Capitol Hill.

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