26 Corporations That Paid Their CEOs More Than Uncle Sam

Plus: Four executive-pay loopholes that cost taxpayers $14 billion a year.

Where's my money?Painting by James Montgomery Flagg/Wikipedia Commons

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


In recent months corporate America has been lobbying the heck out of Washington to lower tax rates on businesses. As it should, defenders say, because corporations have a duty to maximize their return to investors. But if boosting profits were the goal, then you’d think more big companies would stop complaining about taxes, and look instead at an even greater expense: the bloated salaries of their chief executives.

In a just-released report, the Institute for Policy Studies details 26 megacorporations that paid one guy (their CEO) more than they spent on their entire federal tax bills last year. (See our interactive graph below—whoa! Halliburton!) These same companies averaged $1.4 billion in profits—which were announced, in some cases, around the same time they were announcing massive layoffs.

The report also looks at how these companies pull it off. Here, for instance, are the top four executive-pay tax loopholes and their costs to taxpayers.

The loophole: Unlimited tax deductability for executive pay
How it works: Federal laws impose no meaningful limit on the amount of executive compensation corporations may deduct from their taxable income as an expense.
Annual cost to the treasury: $9.7 billion

The loophole: Unlimited deferred compensation
How it works: CEOs may legally shield unlimited amounts of compensation from taxes through special deferred accounts set up by their employers.
Cost to the treasury: $80.6 million

The loophole: Preferential treatment for carried interest
How it works: Investment advisors such as Mitt Romney get paid in stock or equity shares (what’s known as “carried interest”) instead of a cash salary. This allows them to pay taxes on their income at the 15 percent capital gains rate, instead of the 35 percent rate that applies to regular income.
Annual cost to the treasury: $2.1 billion

The loophole: Stock option accounting double standard
How it works: Corporations don’t take tax deductions for executive stock options (which allow execs to buy company stock at a preset price) until after the options are exercised. At that point, the options are often worth much more than at the time they were granted. The corporations may then deduct this difference in value from their taxes as “excess stock compensation.”
Annual cost to the treasury: $2.5 billion

Taken together, these four corporate tax subsidies cost the federal government $14.4 billion a year. Which equates to $46 for every American, or enough money to hire 211,732 elementary school teachers.

Anyway, here’s the CEO graph, which we produced using the IPS’s data. You can mouse over the bars to view detailed figures.

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate