Seven of the 30 largest U.S. corporations paid their CEOs more last year than they paid in federal income taxes, according to a new report.
The study found that those seven companies — Boeing Co, Ford Motor Co, Chevron Corp, Citigroup Inc, Verizon Communications Inc, JPMorgan Chase & Co and General Motors Co. — reported a tax rate of -2.5 percent despite claiming more than $74 billion in combined pre-tax profits.
They paid their chief executives an average of $17.3 million, according to the study by two Washington think tanks — the Institute for Policy Studies and the Center for Effective Government.
The number of American companies that pay their chief executives more than they pay Uncle Sam is growing, researchers found.
The recently released report, “Fleecing Uncle Sam,” found that 29 of the 100 highest-paid CEOs were paid more in 2013 than the corporations they oversee paid in federal income tax.
That’s up from 25 of the top 100 in 2010 and 2011 surveys.
“Our corporate tax system is so broken that large, profitable firms can get away without paying their fair share and instead funnel massive funds into the pockets of top executives,” said Scott Klinger, co-author of the study.
Those 29 corporations operated 237 subsidiaries in tax havens, and only 12 of those corporations reported U.S. losses last year.
CEO pay at those unprofitable firms averaged $36.6 million — more than three times the national average for CEOs of large companies.
Representatives for the corporations cited in the report told Reuters they abided by all tax laws, but they claimed some tax obligations were deferred due to refunds, developmental investments or carry-forwards from heavy losses several years ago.
They also stressed the corporations paid taxes worldwide.
“Corporations are quick to complain that the U.S. tax rate – 35 percent – is the highest among industrialized nations, but they neglect to mention that the average large corporation paid only slightly more than half that rate – just 19.9 percent – between 2008-2012,” the researchers found.
The study’s authors found that job creation remained anemic, with more than 9 million Americans still out of work, while corporations were repurchasing their own stock at record levels and buying out competitors through mergers.
Citigroup — which exists only because of a taxpayer bailout during the financial meltdown — received the largest tax refund.
The firm paid its CEO, Michael Corbat, $18 million last year while claiming $260 million in IRS refunds, the report found.