- Twenty-five of the best-paid chief executive officers in the U.S. earned more in salary and other compensation in 2010 than their companies’ federal income tax expenses as disclosed in public filings, according to a report by the Institute for Policy Studies.
- The Washington-based nonprofit group’s report, released today, examined 100 publicly traded U.S. corporations with the highest-paid CEOs. It found that companies whose CEOs’ compensation exceeded reported tax expense in 2010 had average global profits of $1.9 billion.
- Companies in this group, according to the report, included EBay Inc., General Electric Co., Verizon Communications Inc., Boeing Co. and Dow Chemical Co. The tax expense reported in annual financial statements can differ from actual tax payments, which are confidential, for a variety of reasons.
- The group said its findings underscore the need for an overhaul of the U.S. tax code that would reduce the number of tax strategies available to companies, especially their ability to lower tax payments by parking profits overseas. “Tax reform has to close up some of these loopholes and the offshore system,” Chuck Collins, one of the report’s authors, said in an interview. “We might be able to lower the overall corporate rate by broadening the base.”
- Eighteen of the 25 companies mentioned in the report operated subsidiaries in countries known as offshore tax havens, Collins said. The firms, all combined, had 556 tax haven subsidiaries last year.
- Twenty of the 25 companies on the institute’s list reported spending more on lobbying Congress than they did on federal taxes, the organization said. Data for the report was taken from annual reports and other public filings. The 25 firms highlighted in this study spent a combined total of more than $150 million on lobbying and campaign contributions last year.
- The report echoes some elements of a study released in May by Citizens for Tax Justice, a Washington-based nonprofit group backed by labor unions, which said 11 U.S. corporations reported $62 billion in domestic profits while paying a negative 3.6 percent tax rate in 2010.
Link to original report here.
- In 2009, we calculate, major corporate CEOs took home 263 times the pay of America's average workers. Last year, this gap leaped to 325-to-1.
Some neat examples:
- Verizon, which earned $11.9 billion in pretax United States profits, received a federal tax refund of $705 million. (damn that onerous 35% tax rate!) The company’s chief executive, Ivan Seidenberg, meanwhile, received $18.1 million in compensation.
- The online retailer eBay reported pretax profits of $848 million and received a $113 million federal refund. John Donahoe, eBay’s chief executive, collected a compensation package worth $12.4 million, the study said.
[Oct 7, 2009: Dylan Ratigan - America Being Subjected to "Corporate Communism"]
[Mar 25, 2011: NYT - GE's Strategies Let it Avoid Taxes Altogether]
[Apr 14, 2011: U.S. Corporate Taxes - 1955 v 2010]