Of America’s 30 largest corporations, seven paid their CEOs more last year
Our Report Findings:
As Congress appears set to prioritize the renewal of corporate tax breaks in the lame-duck session, our report reveals stark indicators of the extent to which large corporations are avoiding their fair share of taxes.
Of America’s 30 largest corporations, seven (23 percent) paid their CEOs more than they paid in federal income taxes last year.
- All seven of these firms were highly profitable, collectively reporting more than $74 billion in U.S. pre-tax profits. However, they received a combined total of $1.9 billion in refunds from the IRS, giving them an effective tax rate of negative 2.5 percent.
- The seven CEOs leading these tax-dodging corporations were paid $17.3 million on average in 2013. Boeing and Ford Motors both paid their CEOs more than $23 million last year while receiving large tax refunds.
Of America’s 100 highest-paid CEOs, 29 received more in pay last year than their company paid in federal income taxes – up from 25 out of the top 100 in our 2010 and 2011 surveys.
- Together, these 29 CEOs made nearly $1 billion last year, or $32 million on average. Their corporations reported $24 billion in U.S. pre-tax profits and yet, as a group, claimed $238 million in tax refunds, an effective tax rate of negative one percent.
- Combined, the 29 companies operate 237 subsidiaries in tax havens. The company with the most subsidiaries in tax havens was Abbott Laboratories, with 79. The pharmaceutical firm’s CEO paycheck was $4 million larger than its IRS bill in 2013.
- Of the 29 firms, only 12 reported U.S. losses in 2013. At these 12 unprofitable firms, CEO pay averaged $36.6 million—more than three times the $11.7 million national average for large company CEOs.
- The company that received the largest tax refund was Citigroup, which owes its existence to taxpayer bailouts. In 2013, Citi paid its CEO $18 million while pocketing an IRS refund of $260 million.
- Three firms have made the list in all three years surveyed. Boeing, Chesapeake Energy, and Ford Motors paid their CEO more than Uncle Sam in 2010, 2011, and 2013.
For corporations to reward one individual, no matter how talented, more than they are contributing to the cost of all the public services needed for business success reflects the deep flaws in our corporate tax system. Rather than more tax breaks, Congress should focus on addressing these deep flaws by cracking down on the use of tax havens, eliminating wasteful corporate subsidies, and closing loopholes that encourage excessive executive compensation.
How They Dodge Taxes:
Our Full Report:
Image Credits: Icon Pak by Freepik / Flickr users Beverly & Pack, Danielle Scott, and Woodley Wonderworks. Used under a Creative Commons license.