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Many companies paying CEOs more than Uncle Sam
Author: Scarinci Hollenbeck, LLC
Date: November 26, 2014
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In a report released recently, the Institute for Policy Studies found that seven of the largest 30 companies by revenue in the U.S. paid their chief executives more than they did in corporate tax last year.
According to the report, Boeing, Ford, Chevron, Citigroup, Verizon, J.P. Morgan and GM all paid more to their CEOs than they did in corporate taxes. All of these companies but Chevron received money back from the government in the form of a rebate or subsidy. This is despite the fact that the pre-tax revenues for these companies came to more than a combined $74 billion. In all, they received a combined net $1.8 billion from taxpayers – that comes to about $5.69 from every man, woman and child living in the United States.
CEO pay – a contentious issue in the United States – looked strikingly different. All of these CEOs received more than their companies paid in taxes, coming to a combined $121 million, but considering that all but one received money back from the government, this is hardly surprising.
What is striking, however, is that this state of affairs appears to be increasingly common, according to the report. Of the 100 top-earning CEOs in 2013, 29 received a larger salary than their company paid in taxes. On average, these 29 firms reported $817 million in U.S. pre-tax income, received $8 million in tax refunds and paid their CEO $32 million.
Disputed figures and characterizations
Speaking to Reuters, several companies disputed the findings of the Institute for Policy Studies. Verizon told the news source that it paid $422 million in income taxes in 2013 – a considerable difference from the negative $197 million cited in the report. Boeing said that its global 2013 tax bill came to $1.6 billion, but did note that all but $5 million was deferred
By far, the largest tax refund recipient among the 30 top U.S. companies was J.P Morgan, according to the report. Of the $1.8 billion cited as the total refunds received, J.P. Morgan accounted for more than $1.3 billion. The company’s CEO was paid a relatively meager $11.8 million.
It should be noted that a significant portion of J.P. Morgan’s refund came from a tax deductible settlement made last year. According to the company’s website, its total 2013 net income came to $17.9 billion out of $99.8 billion in revenues. Under the U.S. top income rate of 35 percent, its tax bill would ordinarily come to about $6.3 billion.
However, the company agreed to a $13 billion settlement last year for its alleged role in causing the housing crisis, according to Reuters. Of that, $11 billion was tax deductible, which helps to account for a sizeable portion of the difference.
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Many companies paying CEOs more than Uncle Sam
Author: Scarinci Hollenbeck, LLC
In a report released recently, the Institute for Policy Studies found that seven of the largest 30 companies by revenue in the U.S. paid their chief executives more than they did in corporate tax last year.
According to the report, Boeing, Ford, Chevron, Citigroup, Verizon, J.P. Morgan and GM all paid more to their CEOs than they did in corporate taxes. All of these companies but Chevron received money back from the government in the form of a rebate or subsidy. This is despite the fact that the pre-tax revenues for these companies came to more than a combined $74 billion. In all, they received a combined net $1.8 billion from taxpayers – that comes to about $5.69 from every man, woman and child living in the United States.
CEO pay – a contentious issue in the United States – looked strikingly different. All of these CEOs received more than their companies paid in taxes, coming to a combined $121 million, but considering that all but one received money back from the government, this is hardly surprising.
What is striking, however, is that this state of affairs appears to be increasingly common, according to the report. Of the 100 top-earning CEOs in 2013, 29 received a larger salary than their company paid in taxes. On average, these 29 firms reported $817 million in U.S. pre-tax income, received $8 million in tax refunds and paid their CEO $32 million.
Disputed figures and characterizations
Speaking to Reuters, several companies disputed the findings of the Institute for Policy Studies. Verizon told the news source that it paid $422 million in income taxes in 2013 – a considerable difference from the negative $197 million cited in the report. Boeing said that its global 2013 tax bill came to $1.6 billion, but did note that all but $5 million was deferred
By far, the largest tax refund recipient among the 30 top U.S. companies was J.P Morgan, according to the report. Of the $1.8 billion cited as the total refunds received, J.P. Morgan accounted for more than $1.3 billion. The company’s CEO was paid a relatively meager $11.8 million.
It should be noted that a significant portion of J.P. Morgan’s refund came from a tax deductible settlement made last year. According to the company’s website, its total 2013 net income came to $17.9 billion out of $99.8 billion in revenues. Under the U.S. top income rate of 35 percent, its tax bill would ordinarily come to about $6.3 billion.
However, the company agreed to a $13 billion settlement last year for its alleged role in causing the housing crisis, according to Reuters. Of that, $11 billion was tax deductible, which helps to account for a sizeable portion of the difference.