Seven of the 30 largest corporations in US paid more to their CEOs than they did in taxes

November 19th, 2014  |  Source: The Guardian

Taxes?    No problem.

Ford CEO Alan Mulally earned $23.2m last year while Ford got a tax refund of $19m.

This most recent gap between executive pay and taxes is part of an alarming trend reflecting a generous corporate tax code

Which would you think would be larger for Ford Motor, a company that last year reported revenues of $139.4b: the taxes it pays the US federal government or the compensation it pays its CEO?

If you picked option B, congratulations – you may be cynical, but you’re right. Alan Mulally, Ford’s CEO, pocketed a compensation package that totaled $23.2m while Ford itself got a US federal tax refund of $19m.

And Ford isn’t the only company to pay its CEO more than it forked over to Uncle Sam. 

Seven of the country’s 30 largest corporations paid more to their CEOs than they did in taxes last year, according to a just-released study by the Center for Effective Government and the Institute for Policy Studies.

The biggest gap between executive pay and taxes was at Citigroup. Michael Corbat, Citigroup’s CEO had a compensation package that totaled $17.6m. 

At the same time, Citigroup qualified for a $260m tax refund from the IRS, thanks to a special waiver that enabled it to capture the full tax benefits of buying unprofitable businesses. This could be a tax gift that keeps on giving, as the bank has been on a tear to keep earning more to take full advantage of the provision. 

The rift between tax burden and executive pay for big companies is “getting worse”, says Scott Klinger, director of revenue and spending policies at the Center for Effective Government.

Since the Center for Effective Government and the Institute for Policy Studies published their first report in 2010, the average compensation of the CEOs they single out has climbed from $16.7m to almost $32m. Meanwhile, corporate profits zoom higher, while the effective tax rate, in absolute terms and as a percentage of GDP, languishes near historic lows




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