Ford CEO Alan Mulally (above) earned $23.2m last year while
Ford got a tax refund of $19m.
Seven of the country’s 30 largest corporations paid
more to their CEOs than they did in taxes last year, according to a
just-released study by the Center for Effective Government and the Institute
for Policy Studies.
The biggest gap between executive pay and taxes was
at Citigroup.
Michael Corbat, Citigroup’s CEO had a compensation package that totaled
$17.6m.
At the same time, Citigroup qualified for a $260m
tax refund from the IRS, thanks to a special
waiver that enabled it to capture the full tax
benefits of buying unprofitable businesses. This could be a tax gift that keeps
on giving, as the bank has been on
a tear to keep earning more to take full advantage of the
provision.
The rift between tax burden and executive pay for
big companies is “getting worse”, says Scott Klinger, director of revenue and
spending policies at the Center for Effective Government.
Since the Center for Effective Government and the
Institute for Policy Studies published their first report in 2010, the average
compensation of the CEOs they single out has climbed from $16.7m to almost
$32m.
And, there’s a widening rift between corporate
profits and the jobs they create. After tax, corporate profits last year
accounted for 10% of GDP, higher
than ever recorded. The contribution of employee
incomes to GDP has been sliding steadily lower since the 1970s.
Indeed, he notes that most of the corporations whose
names appear on his list – nearly all of which are profitable – have been
nearly as active reducing their workforce over the past year as they have been
trying to cut their tax burden.
Washington state gave Boeing $8.7bn in tax breaks to
ensure that the 777x was built in the state, but the aerospace company has been
shifting engineering jobs to lower-wage areas, saving
the company $100m a year and resulting in layoffs.
Citigroup and JP Morgan Chase – both on “the list” – have slashed
jobs in
the past few years. Ford has been closing
down plants and axing jobs, too.
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