STUDY: 25 Of Highest Paid CEOs Earned MORE Than Their Companies Paid In Taxes, Others Spent More On Lobbying Than Taxes
Reprinted with permission.
(Reuters) - Twenty-five of the 100 highest paid U.S. CEOs earned more last year than their companies paid in federal income tax, a pay study said on Wednesday.
It also found many of the companies spent more on lobbying than they did on taxes.
At a time when lawmakers are facing tough choices in a quest to slash the national debt, the report from the Institute for Policy Studies (IPS), a left-leaning Washington think tank, quickly hit a nerve.
After reading it, Democratic Representative Elijah Cummings, ranking member of the Committee on Oversight and Government Reform, called for hearings on executive compensation.
In a letter to that committee's chairman, Republican Darrell Issa, Cummings asked "to examine the extent to which the problems in CEO compensation that led to the economic crisis continue to exist today."
He also asked "why CEO pay and corporate profits are skyrocketing while worker pay stagnates and unemployment remains unacceptably high," and "the extent to which our tax code may be encouraging these growing disparities."
In putting together its study, IPS chose to compare CEO pay to current U.S. taxes paid, excluding foreign and state and local taxes that may have been paid, as well as deferred taxes which can often be far larger than current taxes paid.
The group's rationale was that deferred taxes may or may not be paid, and that current U.S. taxes paid are the closest approximation in public documents to what companies may have actually written a check for last year.
$16.7 MILLION AVERAGE
Compensation for the 25 CEOs with pay surpassing corporate taxes averaged $16.7 million, according to the study, compared to a $10.8 million average for S&P 500 CEOs. Among the companies topping the IPS list:
* eBay whose CEO John Donahoe made $12.4 million, but which reported a $131 million refund on its 2010 current U.S. taxes.
* Boeing, which paid CEO Jim McNerney $13.8 million, sent in $13 million in federal income taxes, and spent $20.8 million on lobbying and campaign spending
* General Electric where CEO Jeff Immelt earned $15.2 million in 2010, while the company got a $3.3 billion federal refund and invested $41.8 million in its own lobbying and political campaigns.
Though the companies come from different industries, their tax breaks fall into two primary areas.
Two-thirds of the firms studied kept their taxes low by utilizing offshore subsidiaries in tax havens such as Bermuda, Singapore and Luxembourg. The remaining companies benefited from accelerated depreciation.
Shareholders have responded favorably when companies in which they invest keep a tax bill low through legal methods, thereby benefiting earnings. But Chuck Collins, an IPS senior scholar and co-author of the report, said that is a mistake.
"I think it's an exposure of weakness in a company if their profitability is dependent on their accounting department and not on making better widgets," he said.
In prior reports, Collins said, out-sized CEO pay was often a red flag of bigger problems to come. The IPS has been putting a pay report together for 18 years. Among those whose leaders have made the high pay list in years past, only to have their businesses falter: Tyco, Enron and WorldCom.
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Related story:
(Reuters) - Backed by powerful companies spending millions of dollars, Washington lobbyists are fighting in the marble corridors of Congress for a tax break on $1.5 trillion in profits held overseas to escape the U.S. tax man.
When lawmakers return next month from summer break, powerful high-tech and pharmaceutical companies will step up their push for an overseas profit tax repatriation holiday and pose a test for President Barack Obama. (For a graphic please click on r.reuters.com/fuj43s)
The idea has been kicking around for months, gaining only limited traction, but supporters sense their moment may be near, with the economy sluggish and Obama searching for new ways to ignite business investment and create jobs.
A repatriation tax holiday offers just that, advocates say, although critics contend the proposal's promises of economic stimulus are illusory and serve only to mask a tax break costing the United States $80 billion over 10 years.
The White House, so far, has stood firm against a holiday, refusing to consider it outside the context of making broad changes in the convoluted tax code.
Sep 22, 2011 at 12:52 AM
Reader Comments (20)
http://www.reuters.com/article/2011/08/31/us-usa-rice-cheney-idUSTRE77U6GN20110831
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http://www.cnsnews.com/news/article/gallup-obama-s-approval-hits-all-time-lo-0
http://www.reuters.com/article/2011/08/30/us-usa-fed-minutes-idUSTRE77T4EX20110830
http://www.reuters.com/article/2011/08/31/us-wikileaks-cyberattack-idUSTRE77U17920110831
“Las Vegas has gone from having the lowest unemployment in the nation at 4 per cent to the highest,” says Brian Burton, president of Three Square, the Nevada-based non-profit food bank. “We are number one in foreclosures, number one in bankruptcies, number one in unemployment [and] we have 300,000 people that are worried about where their next meal is going to come from.”
http://www.ft.com/intl/cms/s/0/201918ee-d3af-11e0-bc6b-00144feab49a.html#axzz1WekFVkPz
http://www.infowars.com/man-faces-life-in-jail-for-recording-police/
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http://dailycaller.com/2011/08/31/rep-west-to-reconsider-cbc-membership-if-tea-party-bashing-not-condemned/#ixzz1WemT78qu
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http://youtu.be/G96TY5JsV-s
About Vegas, it's sad indeed. There are programs here that are really a grass roots effort to feed children that go to school hungry every day. Churches and various organizations have pulled together because it's worse than anyone outside of Vegas knows. You see, so much never makes the news because the mind set is not to detour tourist/visitors. I would if you want to know who is a powerhouse of a CEO, look into Gary W. Loveman. He doesn't just CEO the worlds largest gaming corporation. He involved with FedEx and a few others.
One reporter noted after the huge gaming mergers in 2004-05 that Gary Loveman was so far in front of CEO's that there was no second place. Literally. Second place went to the guy under him in the same organization. He purchased a tone of foreclosed homes in an area of Vegas that is very nice and brand new called Anthem. The blip article read that he intended to build a compound there. That would be only one of his homes to. He travels back and fourth from Mass to Vegas.
I tried to keep track of the news articles on Loveman for a long time. I learned that if you don't keep them right when you get them they have a tendency to disappear.
That said I may want to keep my mouth shut because I may disappear for saying such things. You never know, some things never change and I don't want to find out harder than the way I already have. LOL!!! (for now that is)
'Ample evidence suggests that ... corporations are expending considerably more energy on avoiding taxes than perhaps ever before,' study concludes
http://www.msnbc.msn.com/id/44338047/ns/business-us_business/
http://finance.yahoo.com/blogs/daily-ticker/where-gone-jack-welch-ceo-pay-rise-while-193022445.html
"There are programs here that are really a grass roots effort to feed children that go to school hungry every day. Churches and various organizations have pulled together because it's worse than anyone outside of Vegas knows."
What the hell's wrong with this country? So many focused on abortion they don't care about hungry children or infant deaths in link. This DYING country is #34. WTF
http://en.wikipedia.org/wiki/List_of_countries_by_infant_mortality_rate
The last numbers are a third year count. Most amazing thing about that it is across the board. Meaning world wide. Which perhaps may be a sigh of world wide stress. I don't know how you feel about that TR, but I think stress itself is a killer.
Thanks for sharing that. That's a pretty strong point. One perhaps that could be used in these debates.
Just a quick note. My wife noticed that there is all this stuff in the paper, goog will, salvation army etc. Yet homeless numbers rise.
I'm sure someone has a good reason to gain a profit from all this stuff. We talking everything from huge landscape rock to jacuzzi's to washers and dryers, all listed as "free just come pick up".
I wonder why it doesn't go to help people in durress over all this fraud and so on? I can only hope people will adopt a new strategy and fast to help others get back on their feet. In the long run it's the only way money will begin to flow. Acording to just this chart. Whew! I can only hope it happens fast.
Could not agree with you more TR. I have know Afghanistan had the lowest life exspectancy @ 17 1/2 yrs. It's not a surprise infant death rate is so high as well. Not to mention tragic as is sad.
The Wiki chart is interesting indeed. Just a quick glace at it shows something that should raise a brow to anyone looking at it.
In the US, which has only grown in size and numbers since 1950-55. During that time the rate of infant loss per 1,000 was highest at 30.46 and stedily decreaced every year until 2005 to current 6.86-707.00
Afghanistan 1950-55. 275.03 to 2005 and current. 135.95. 144.01.
The last numbers are a third year count. Most amazing thing about that it is across the board. Meaning world wide. Which perhaps may be a sigh of world wide stress. I don't know how you feel about that TR, but I think stress itself is a killer.
Thanks for sharing that. That's a pretty strong point. One perhaps that could be used in these debates.
Just a quick note. My wife noticed that there is all this stuff in the paper, goog will, salvation army etc. Yet homeless numbers rise.
I'm sure someone has a good reason to gain a profit from all this stuff. We talking everything from huge landscape rock to jacuzzi's to washers and dryers, all listed as "free just come pick up".
I wonder why it doesn't go to help people in durress over all this fraud and so on? I can only hope people will adopt a new strategy and fast to help others get back on their feet. In the long run it's the only way money will begin to flow. Acording to just this chart. Whew! I can only hope it happens fast.