Some U.S. firms paid more to CEOs than taxes: study

[Bad_Daddy 2,209]

http://news.yahoo.com/u-firms-paid-more-ceos-taxes-study-040551766.html

By Nanette Byrnes | Reuters – 5 hrs ago

WASHINGTON (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 billion, 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.

[Bad_Daddy 2,209]

Tax loopholes ...naw say it ain't so.

[^_^ 5,021]

What are you, some kinda Communist?

[Bad_Daddy 2,209]

What are you, some kinda Communist?

You know it's messed up when Boeing payed almost twice as much for lobbyist than they did taxes. This country is so messed up.

[^_^ 5,021]

You know it's messed up when Boeing payed almost twice as much for lobbyist than they did taxes. This country is so messed up.

The only reason they have to spend so much on lobbying is because of those evil Democrats who want to gouge them. Ideally, corporations should pay no taxes at all and should not have to defend their right to not pay. That we make them spend so much to defend what is right is the real scandal here.

[Bad_Daddy 2,209]

The only reason they have to spend so much on lobbying is because of those evil Democrats who want to gouge them. Ideally, corporations should pay no taxes at all and should not have to defend their right to not pay. That we make them spend so much to defend what is right is the real scandal here.

You left out the part where we need to do away with minimum wage and labor laws. These corporations can't afford stupid stuff like that...it's killing business in America.

[^_^ 5,021]

You left out the part where we need to do away with minimum wage and labor laws. These corporations can't afford stupid stuff like that...it's killing business in America.

Yup. Labor laws and minimum wages are nothing more than big government interventions in the free market. They're ways to help losers and oppress winners.

[The_Dude 1,142]

Yup. Labor laws and minimum wages are nothing more than big government interventions in the free market. They're ways to help losers and oppress winners.

Don't forget about consumer and labor protection laws. We'll need to get rid of those if we're going to compete with China.

[Mr. Big Dog 10,747]

* eBay whose CEO John Donahoe made $12.4 million, but which reported a $131 million refund on its 2010 current U.S. taxes.

* 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.

What's this hating on the CEOs all about? Why are they singled out? In the case of these two companies, clearly, anyone who worked there got paid more than the companies paid in federal taxes. Even the lazy mail room clerk who got fired after a single day on the job got paid more than the companies paid in federal taxes.