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.

WE CAME UP SHORT.

We just wrapped up a shorter-than-normal, urgent-as-ever fundraising drive and we came up about $45,000 short of our $300,000 goal.

That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

So we urgently need this specific ask, what you're reading right now, to start bringing in more donations than it ever has. The reality, for these next few months and next few years, is that we have to start finding ways to grow our online supporter base in a big way—and we're optimistic we can keep making real headway by being real with you about this.

Because the bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. We really need to see if we'll be able to raise more with this real estate on a daily basis than we have been, so we're hoping to see a promising start.

payment methods

WE CAME UP SHORT.

We just wrapped up a shorter-than-normal, urgent-as-ever fundraising drive and we came up about $45,000 short of our $300,000 goal.

That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

So we urgently need this specific ask, what you're reading right now, to start bringing in more donations than it ever has. The reality, for these next few months and next few years, is that we have to start finding ways to grow our online supporter base in a big way—and we're optimistic we can keep making real headway by being real with you about this.

Because the bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. We really need to see if we'll be able to raise more with this real estate on a daily basis than we have been, so we're hoping to see a promising start.

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