In 2013, seven of the 30 largest US corporations paid their chief executive officers more in remuneration than they paid in US federal income taxes, according to a new study.
The seven companies came out ahead after taxes, accruing $1.9 billion more than they owed, according to the Institute for Policy Studies and the Center for Effective Government, the study’s co-authors. Combined, the seven last year reported more than $74 billion in US pre-tax profits.
The CEOs of all seven corporate giants were paid an average of $17.3 million last year.
The seven companies included Boeing Co., Chevron Corp., Citigroup Inc., Ford Motor Co., General Motors Co., JPMorgan Chase & Co., and Verizon Communications Inc.
Boeing and Ford both paid their CEOs more than $23 million in 2013 while receiving hefty tax refunds, the study found.
The two think tanks that put out the study said the findings show “deep flaws in our corporate tax system.”
“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,” said the Institute for Policy Studies.
Combined, those 29 companies operated 237 subsidiaries in tax havens last years, the study reported. A separate study released in April found that more than $2 trillion worth of profit generated by some of the biggest US-based corporations is being held overseas, away from Uncle Sam’s reach.
Verizon said it paid $422 million in income taxes to the US in 2013. The company criticized the results of the study, saying it paid more in taxes than to its CEO, Daniel S. Mead.
"We do not provide a breakdown between federal vs. state in that total; however, I am confirming for you that the federal portion of that number is well more than Verizon's CEO's compensation," a spokesman told Reuters.
Citigroup, like the other companies, insisted they followed US tax laws.
"In 2013, Citi paid more than $3 billion in payroll taxes and more than $95 million in use tax, personal property and real property taxes in the US,” a spokesman said.
Boeing said its 2013 global tax bill was $1.6 billion, yet all but $5 million was deferred based on development and production investments. A company spokesman said current tax expense and cash taxes were likely to go up as Boeing’s 787-jet deliveries increase.
Ford and General Motors said their current US tax bills are reduced by tax-loss carry forwards based on deep losses amid the Great Recession a few years ago.
Chevron told Reuters its 2013 current US income tax expense of $15 million “was much lower than normal” based on various factors.
JPMorgan Chase declined to comment to Reuters.
“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,” the study’s authors said.
“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.”
A report released in February found that 26 of the most powerful American corporations paid no federal income tax from 2008 to 2012.