US companies paid more to CEOs than in taxes
New York: Twenty-six big US companies paid their CEOs more last year than they paid the federal government in tax, according to a study released on Thursday by a liberal-leaning think tank.
The study, by the Institute for Policy Studies, said the companies, including AT&T, Boeing and Citigroup, paid their CEOs an average of USD 20.4 million last year while paying little or no federal tax on ample profits, according to regulatory filings.
On average, the 26 companies generated net income of more than USD 1 billion in the US, the study said.
The study blasted tax rules allowing unlimited deductions for CEO "performance-based" pay, like many stock options. It said the five biggest performance payers among the 26 companies took USD 232 million of these deductions last year.
Among the "kingpins" it criticized was CEO James McNerney Jr of Boeing. It said he got USD 18.4 million in pay last year while his company received a tax refund of USD 605 million.
The study also laid into Citigroup for paying CEO Vikram Pandit USD 14.9 million while the bank received a net USD 144 million in tax benefits.
Eighteen of the 26 companies received cash back or credits to apply against tax in the future, according to the report.
The study, a 45-page attack on the corporate tax code, said deductions and credits are allowing companies to lavish big pay packages on executives so they can cut their tax bills while Washington gets less money in a time of trillion-plus deficits.
"Our nation's tax code has become a powerful enabler of bloated CEO pay," the study said.
To calculate tax, the study used companies' own math based on accounting rules. Regulators require companies to estimate their tax bill and disclose it in public documents for investors.
The tax filings the companies make to the government, typically in September, are private and can differ from the estimate.
Another problem is that the study doesn't count tax the company plans to pay but has deferred to future years. The authors argue that deferred tax can be put off indefinitely.