32 Firms That Renounced America Paid CEOs $439 Million Last Year
by Scott Klinger, 9/8/2014
A trickle has turned into a torrent. Burger King’s announcement last week that it would buy Canadian donut darling, Tim Horton’s, and then move the merged corporation to Canada represents the 13th such deal announced this year. Most companies pursuing these “corporate inversions” have abandoned America for the express purpose of lowering their U.S. tax bills.
This year’s baker’s dozen of tax dodgers join 76 firms that have shed their U.S. identities and re-registered abroad since 1983, with 47 adopting inversions in the last decade alone, according to a May 2014 report by the Congressional Research Service.
Firms that refuse to pay taxes to support the public services and people that have helped their businesses thrive defend their actions by saying they are simply responding to their financial obligations to shareholders to lower company costs and boost corporate profits. Does that passion for cutting costs carry over to the pay of company CEOs?
We looked at the pay of the 32 companies that have undergone foreign corporate inversions and continue to report their executive compensation in their annual proxy statements filed with the U.S. Securities and Exchange Commission (SEC). We counted salary, bonus, non-equity compensation, perks (including personal use of corporate jets, country club fees, and personal financial service planning), as well as the value of stock grants vested and stock options cashed in. We did not include the theoretical value of new stock grants or stock options.
The CEOs of these firms collectively took home $439 million in 2013, an average of $13.7 million per CEO. Eight of the CEOs pocketed more than $20 million each, and Stephen Luczo, CEO of Seagate Technology, took home nearly $46 million last year. Seagate is a cloud-based data storage firm that operates out of California but is incorporated in Ireland.
|Inversion Date||Company||CEO||Total realized pay (2013)|
|2000||Seagate Technology||Stephen Luczo||$ 45,983,571|
|1994||Helen of Troy||Gerald Rubin||$ 41,928,803|
|2008||ACE Limited||Evan Greenberg||$ 32,388,252|
|2012||AON||Gregory Case||$ 28,527,238|
|2012||Eaton||A M Cutler||$ 28,141,754|
|2013||Liberty Global||Michael Fries||$ 26,854,087|
|1996||Chicago Bridge and Iron||Philip Asherman||$ 24,905,336|
|2002||Ingersoll Rand||M W Lamach||$ 24,104,757|
|2013||Perrigo||Joseph Papa||$ 19,436,931|
|2000||Everest Reinsurance||Joseph Taranto||$ 16,884,027|
|2008||Covidien||Jose Almeida||$ 14,066,086|
|2011||Alkermes||Richard Pops||$ 13,240,087|
|2010||Valeant||Michael Pearson||$ 12,840,460|
|2012||Pentair||Randall Hogan||$ 12,527,625|
|2008||TE Connectivity||Thomas Lynch||$ 10,581,959|
|2009||ENSCO||Daniel Rabun||$ 10,545,183|
|2014||Medtronic||Omar Ishrak||$ 8,331,159|
|2002||Herbalife||Michael Johnson||$ 7,550,490|
|2002||Noble Corp||David Williams||$ 6,900,800|
|2000||Actuant (Applied Power)||Robert Arzbaecher||$ 6,801,432|
|1999||Transocean||Steven Newman||$ 6,594,307|
|2001||Foster Wheeler||Kent Masters||$ 6,231,992|
|2002||Weatherford International||Bernard Duroo-Danner||$ 5,801,947|
|2012||Jazz Pharmaceuticals||Bruce Cozadd||$ 5,725,092|
|1997||Tyco International||George Oliver||$ 5,414,355|
|2012||Rowan Companies||Matt Ralls||$ 4,601,781|
|2012||Tronox||Thomas Casey||$ 4,116,806|
|2014||Mallinckrodt Pharmaceuticals||Mark Trudeau||$ 2,118,129|
|1983||McDermott International||Stephen Johnson||$ 1,833,089|
|1999||Xoma||John Varian||$ 1,824,421|
|1999||White Mountain Insurance||Raymond Barrette||$ 1,245,289|
|2010||Global Indemnity||Cynthia Valko||$ 745,483|
Notes: Source of CEO pay data is company proxy statement (Form DEF 14A) filed with U.S. Securities and Exchange Commission. Data current as of Sept. 4, 2014. Total realized pay includes salary, bonus, non-equity incentive compensation, value of stock options exercised, and stock awards vested. Total realized pay excludes formulaic value of new stock option grants and new stock awards.
Helen of Troy CEO Gerald Rubin retired on Jan. 14, 2014, after serving less than seven months of the fiscal year. Reported numbers for Helen of Troy include only Mr. Rubin’s pay and do not include the pay of his successor for the balance of the year.
McDermott CEO Stephen Johnson left the company on Dec. 16, 2013, two weeks prior to the end of the fiscal year. Reported numbers for McDermott include only Mr. Johnson’s pay and do not include the pay of his successor, David Dickson.
These CEOs grew their companies with the protection of U.S. laws and with public investment in education, infrastructure, and basic research. But now that they’re successful, they no longer want to support the system that allowed and supported their growth.
Sen. Carl Levin (D-MI) and Rep. Sander Levin (D-MI) have introduced The Stop Corporate Inversions Act of 2014. The legislation would impose a two-year moratorium on inversions and change the rules governing them. Under the new rules, companies would have to be managed from outside the United States and give up ownership control to foreign partners in order to be considered a foreign company for U.S. tax purposes. U.S. managers could not use the legal change to reduce their corporation’s tax bill while maintaining their American lifestyle and control over their company. The Joint Committee on Taxation estimates this legislation would save the U.S. Treasury $19.5 billion over the next decade.