Full article at:
http://news.yahoo.com/u-firms-paid-more-ceos-taxes-study-040551766.html
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 by a Washington think tank said on Wednesday.
At a time when lawmakers are facing tough choices in a quest to slash
the national debt, the Institute for Policy Studies, a left-leaning
group, said it also found many of the companies spent more on lobbying
than they did on taxes.
The senior Democrat on the House of Representatives oversight committee,
Elijah Cummings, called for hearings on executive compensation "to
examine the extent to which the problems in CEO compensation that led to
the economic crisis continue to exist today."
Several companies mentioned in the report took issue with its
methodology and said they paid all taxes owed.
General Electric spokesman Andrew Williams called the study "inaccurate"
and noted it did not include significant income taxes paid in 2010 for
previous years, or state taxes paid. "GE pays what it owes," he wrote in
an e-mail response to questions.
Boeing spokesman Chaz Bickers said the study is "simply wrong".
Instead of Boeing's reported "U.S. federal current tax expense" of $13
million which the IPS used, he said a better approximation of the
company's taxes paid would be the $360 million it reported as its net
income tax payments, most of which, he says, was federal....
...$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 million, 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.
(Reporting by Nanette Byrnes; Editing by Howard Goller, Todd Eastham and
Jackie Frank)
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