Of last year’s 100 highest-paid US CEOs, twenty-five took home more in compensation than their company paid in 2010 federal income taxes. As a new report by the Institute for Policy Studies reveals, these twenty-five CEOs averaged $16.7 million, well above last year’s $10.8 million average for S&P 500 CEOs.
Even more stunning is the fact that most of the companies they ran actually came out ahead at tax time, collecting tax refunds from the IRS that averaged $304 million, instead of contributing their tax dollars to the common coffers.
In the slides that follow, the Institute for Policy Studies’s Sarah Anderson uncovers ten companies that paid their CEOs more last year than they paid in corporate income taxes.
Image credit: Francis Reynolds
US federal income taxes: $249 million refund
CEO compensation: $12.3 million
International Paper has received more than $2 billion in tax benefits over the past two years as a result of successful lobbying to include a wood pulp byproduct called “black liquor” in a federal subsidy program intended to spur the development of new biofuels. This byproduct has been used by paper mills as fuel since the 1930s. CEO John Faraci got a 75 percent pay increase, in part thanks to this tax boondoggle.
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US federal income taxes: $722 million refund
CEO compensation: $16.2 million
Prudential has pocketed millions in tax subsidies by manipulating the qualification criteria for incentives designed to promote low-income community job creation. For example, a renovation of the ritzy Blackstone Hotel in Chicago qualified for $15.6 million in tax credits because of the high number of college students living in the area (who are hardly poor, but technically low-income).
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US federal income taxes: $705 million refund
CEO compensation: $18.1 million
Even with earnings of $11.9 billion in pre-tax US profits last year, Verizon still received a major tax refund. This means the telecom giant paid less in federal income taxes than every one of its customers paid in federal telephone excise taxes. The company also shed 13,000 jobs, the year’s third-highest corporate layoff total.
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US federal income taxes: $3.3 billion refund
CEO compensation: $15.2 million
GE’s aggressive lobbying and use of offshore tax havens landed the company with a $3.3 billion refund in 2010. Its lobbying and PAC contributions last year came to $41.8 million.
Thanks to its fourteen subsidiaries in tax havens like Bermuda, Singapore and Luxembourg, GE’s unrepatriated profits grew by $10 billion in 2010.
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US federal income taxes: $670 million refund
CEO compensation: $19.4 million
Despite US pre-tax income of $2.4 billion last year, Bank of New York Mellon enjoyed $670 million in tax refunds. Meanwhile, officials in eight states are investigating or pursuing litigation against the firm for overcharging state pension funds.
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US federal income taxes: $13 million
CEO compensation: $13.8 million
As the No. 2 federal government contractor, Boeing takes in billions in taxpayer dollars annually, boosting profits and pay for its CEO, Jim McNerney. The company has most recently been criticized for building a new factory in South Carolina to take advantage of subsidies, tax breaks and right-to-work laws that limit union rights.
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US federal income taxes: $90 million refund
CEO compensation: $14 million
This insurance giant has Bermuda’s lack of a corporate income tax to thank for its low IRS bill. The company has 105 subsidiaries in twenty countries considered tax havens, with twenty-five of these registered in Bermuda.
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US federal income taxes: $75 million refund
CEO compensation: $32.6 million
CEO John Lundgren enjoyed a 253 percent pay increase for the merger between Stanley Works and Black & Decker last year, which is expected to result in 4,000 layoffs. Only 39 percent of the company’s shareholders voted in favor of the company’s practices, which includes Lundgren’s compensation, at the most recent annual meeting.
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US federal income taxes: $0
CEO compensation: $21 million
Chesapeake Energy has historically been the recipient of massive tax breaks to bolster domestic energy production, but they have also served to subsidize CEO Aubrey McClendon’s absurd pay packages. He is the 332nd richest American, with a net worth of $1.2 billion.
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US federal income taxes: $131 million refund
CEO compensation: $12.4 million
This online retail giant makes creative use of its thirty-one subsidiaries in nine tax haven countries. In its annual report, for example, it boasts of $584 million in tax savings from recent rule changes in Singapore and Switzerland alone. The company is also actively fighting efforts to apply sales taxes to Internet sales.
For more tax-dodging CEOs and the corporations that pay them, read the Institute for Policy Studies report, ”Executive Excess 2011: The Massive Rewards for Tax Dodging.” For more on what you can do, read Katrina vanden Heuvel’s post “Executive Pay and the Great Tax Dodge.”
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