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Posts Tagged ‘Institute for Policy Studies’


Reporter: Aviva Lev-Ari, PhD, RN

Among companies topping the institute’s list:

* Citigroup, the financial services giant, with a tax refund of $144 million based on prior losses, paid CEO Vikram Pandit $14.9 million in 2011, despite an advisory vote against it by 55 percent of shareholders.

* Telecoms group AT&T paid CEO Randall Stephenson $18.7 million, but was entitled to a $420 million tax refund thanks to billions in tax savings from recent rules accelerating depreciation of assets.

* Drugmaker Abbott Laboratories paid CEO Miles White $19 million, while garnering a $586 million refund. Abbott has 64 subsidiaries in 16 countries considered by authorities to be tax havens, the institute said.

ABBOTT TAKES ISSUE

“This is a blatant misrepresentation of the facts,” Abbott spokesman Scott Stoffel said.

He said Abbott did not get a rebate, but paid the U.S. government $700 million in federal income taxes in 2011, and that the report’s numbers reflect a non-cash accounting adjustment caused by the resolution of various tax matters.

http://www.huffingtonpost.com/2012/08/16/citigroup-att-ceo-pay-taxes_n_1786492.html?utm_hp_ref=business

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then —>>> To watch a video on Top 20 US Companies who have been Paying  their  CEO More Than Taxes To Uncle Sam  —>>>>  click on Exec Comp (live link. below) on HuffingtonPost Web Page —>>> scroll down to the video in a Slide format

Exec Comp

Citigroup, Abbott Laboratories, and AT&T are among the 26 companies that paid more to their CEOsin 2011 than they did in US federal taxes, according to a study released on Thursday.Tax breaks on research and development, past losses, and foreign-held earnings were among those lightening the tax load for many companies on the list, said theInstitute for Policy Studies, a left-leaning think tank in Washington, D.C.

Citi, Abbott and AT&T all took issue with the institute’s methodology. All three said they paid all taxes owed in 2011.

During a presidential election cycle in which wealth and taxes are often debated, the study’s authors said the US tax code has become an enabler of large CEO pay, while also offering companies ways to reduce their tax bills.

Four pay-related tax breaks combined to cost taxpayers $14 billion in uncollected federal taxes, the report said.

The four included breaks dealing with performance-based chief executive pay and stock options, as well as the preferential 15 per cent tax rate on carried interest enjoyed by private equity partners and other financiers, it said.

Compensation for the 26 CEOs whose pay surpassed their companies’ corporate tax bills averaged $20.4 million, according to the study. That average was up 23 per cent over last year.

The average was also significantly higher than pay tracked by separate studies of broader groups. For instance, $10.3 million was the average 2011 direct compensation for 300 large-company CEOs tracked by pay consultants Hay Group.

Current US taxes paid eyed

To get its list, the institute compared CEO pay to current US taxes paid, excluding foreign and state and local taxes that may also have been paid, as well as deferred taxes that can often be far larger than current taxes paid.

The group’s rationale was that US taxes paid are the closest approximation available in public documents to what companies may have actually written in their checks for last year to the US Internal Revenue Service.

Among companies topping the institute’s list: * Citigroup, the financial services giant, with a tax refund of $144 million based on prior losses, paid CEO Vikram Pandit $14.9 million in 2011, despite an advisory vote against it by 55 per cent of shareholders.

Telecoms group AT&T paid CEO Randall Stephenson $18.7 million, but was entitled to a $420 million tax refund thanks to billions in tax savings from recent rules accelerating depreciation of assets.

Drugmaker Abbott Laboratories paid CEO Miles White $19 million, while garnering a $586 million refund. Abbott has 64 subsidiaries in 16 countries considered by authorities to be tax havens, the institute said.

http://economictimes.indiatimes.com/news/international-business/us-companies-like-citigroup-abbott-att-pay-more-to-ceos-than-to-us-government-as-taxes-study/articleshow/15512943.cms

Abbott Paid CEO More Than Taxes To Uncle Sam

By Ed Silverman // August 16th, 2012 // 9:09 am

In this era of increasing scrutiny given to ceo compensation, yet another report has taken a look at how some companies are making use of tax laws and how this compares with the payouts given to the c-suite. Specifically, the Institute for Policy Studies has found that 26 companies last year paid more to their CEOs than they paid in US federal taxes. And one drugmaker had the dubious distinction of making the list: Abbott Laboratories and its ceo, Miles White.

“Our nation’s tax code has become a powerful enabler of bloated CEO pay,” IPS says in discussing its study, which it calls “Executive Excess” and explores such loopholes as unlimited tax deductibility of executive pay, unlimited deferred compensation, preferential treatment of carried interest and stock option accounting double standards. The non-profit think tank also looks at ceo’s who saved the most from Bush-era tax cuts.

“Some tax rules on the books today essentially encourage corporations to compensate their executives at unconscionably higher multiples of what their average workers are paid. Other rules let executives who run major corporations routinely reduce their corporate tax bills. The fewer dollars these corporations pay in taxes, the more robust their eventual earnings and the higher the ‘performance-based’ pay for the CEOs who produce them,” ISP writes.

A few bottom-line findings: last year, 25 of the 100 highest-paid US corporate ceo’s took home more in compensation than their companies paid in federal income taxes, with seven companies making the list in both 2011 and 2010. On average, the 26 companies on the 2011 list had more than $1 billion in US pre-tax income but still received net tax benefits that averaged $163 million. The 26 CEOs on the latest list received $20.4 million in average total compensation last year, a 23 percent increase over the average in 2010 (there is a link to the complete report here).

As for Miles White, IPS calculates that he received total compensation of $19 million, a 5 percent drop. But the drugmaker – which is about to split into two different companies, one of which has a funny name (back story) – purportedly received a $586 million refund. IPS maintains this was achieved, in part, thanks to 64 subsidiaries that operate in 16 countries and are considered tax havens. In a bit of sarcasm, IPS dubs this maneuver “take 64 tax havens and call me in the morning.”

IPS writes “those millions in tax savings are likely to come in handy. After a May 2012 settlement with the Justice Department, the drugmaker must now pay out $1.6 billion for promoting unapproved uses of Depakote, an epilepsy medication. Abbott (allegedly) marketed the drug to nursing homes as a cost-effective way to control patients with dementia and downplayed (its) own research that indicated high risks for the elderly” (read here). The think tank adds that 41 percent of sales reported last year were in the US market, but US operations accounted for 7 percent of overall profits.

An Abbott spokesman, however, essentially called the report flawed. “This is a blatant misrepresentation of the facts,” he writes us, adding that the drugmaker did not receive a refund, but actually paid the US government $700 million in federal income taxes last year. The numbers in the IPS report, he argues, reflect a non-cash accounting adjustment caused by resolution of various tax matters.

http://www.pharmalot.com/2012/08/abbott-paid-ceo-more-than-taxes-to-uncle-sam/ 

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