Of last year’s 100 highest-paid U.S. corporate chief executives, 25 took home more in CEO pay than their company paid in 2010 federal corporate income taxes, according to a new report from the Institute for Policy Studies.
Executive Excess 2011: The Massive CEO Rewards for Tax Dodging, the Institute’s18th annual compensation report, details 'the pernicious impact of hundreds of millions of dollars spent lobbying for corporate tax loopholes and shifting profits to offshore tax havens', says report co-author Chuck Collins.
'Instead of sharing responsibility for addressing our nation’s fiscal challenges', notes Collins, a senior scholar at IPS, 'corporations are rewarding CEOs for aggressive tax avoidance'.
The 25 tax-dodging CEOs the IPS report spotlights averaged $16.7m in pay last year, well above the $10.8m S&P 500 CEO average. Most of their companies registered substantial profits. Yet these same companies actually came out ahead at tax time. They collected, on average, $304m in refunds from the IRS.
Low Taxes, Despite High Profits
The 25 firms that paid their CEOs more than Uncle Sam last year reported average global profits of $1.9 billion. Only one reported negative global returns. Only seven of the 25 companies reported losses in U.S. pre-tax income.
Extensive Use of Tax Havens for Tax Avoidance
Eighteen of the 25 firms operate subsidiaries in offshore tax havens, for a combined total of 556 tax haven subsidiaries. Of the seven companies that reported losses in U.S. pre-tax income, five have a combined total of 267 tax haven subsidiaries and a sixth, Nabors Industries, is headquartered in Bermuda.
Bigger Checks for Influence-Peddling than to the IRS
Of the 25 companies that paid their CEO more than Uncle Sam, 20 also spent more on lobbying lawmakers than they paid in corporate taxes. Eighteen gave more to the political campaigns of their favorite candidates than they paid to the IRS in taxes.
Gap Between CEO and Worker Pay Jumps
S&P 500 CEOs last year collected $10.8 million in average compensation, a 27.8 percent increase over 2009. The gap between CEO and average U.S. worker pay rose from 263-to-1 in 2009 to 325-to-1 last year.
'These 25 companies are extreme examples of how large corporations can get away with picking Uncle Sam’s pocket', says IPS Associate Fellow and report co-author Scott Klinger. 'And while the CEOs clearly benefit, working and middle class families and small businesses are left to pick up the tab'.