Mariner*

[Alex G]

26 firms paid CEOs more than they paid in U.S. taxes, study says
http://www.latimes.com/business/la-fi-ceo-pay-taxes-20120816,0,7442298.story

The study, by the Institute for Policy Studies, said the companies, including AT&T Inc., Boeing Co. and Citigroup Inc., paid their CEOs an average of $20.4 million last year while paying little or no federal taxes on ample profits, according to regulatory filings.

On average, the 26 companies generated net income of more than $1 billion in the U.S., the study said.

The study blasted tax rules allowing unlimited deductions for CEO "performance-based" pay, such as stock options. It said the five biggest performance payers among the 26 companies took $232 million of these deductions last year.

Among the CEOs it criticized was James McNerney Jr. of Boeing. It said he got $18.4 million in pay last year while his company received a tax refund of $605 million.

The study also laid into Citigroup for paying CEO Vikram Pandit $14.9 million while the bank received $144 million in net tax benefits.

Eighteen of the 26 companies received cash back or credits to apply against taxes in the future, according to the report.

The study, a 45-page criticism of the corporate tax code, said deductions and credits are allowing companies to lavish big pay packages on executives so they can cut their tax bills while Washington gets less money in a time of trillion-dollar-plus deficits.

To calculate tax, the study used the companies' own math based on accounting rules. Regulators require companies to estimate their tax bill and disclose it in public documents for investors.

The tax filings the companies make to the government, typically in September, are private and can differ from the estimate.

Another problem is that the study doesn't count taxes the company plans to pay but has deferred to future years. The authors argue that deferred taxes can be put off indefinitely.

Charles Bickers, a Boeing spokesman, said that the company's federal tax bill, including deferred tax, was $1.3 billion last year, not a net credit, as the think tank's study found.

Boeing did lower its tax, in part by using a popular tax credit encouraging companies to spend more on research and development. Bickers said that helped the company hire 11,000 people in the U.S. last year.

"Boeing supports a simpler, more competitive tax code. At the same time, we have put the R&D tax credit to exactly the use it was designed — creating U.S. jobs in a high-value, advanced technology industry," he said in a statement.

The study said AT&T used accelerated depreciation to save $5.2 billion on its 2011 taxes while paying CEO Randall Stephenson $18.7 million last year.

Sarah Lubman, an AT&T spokeswoman, said the deductions encouraged the company to make $20 billion in investments last year. She also said that the deductions won't be available to take in future years, which should increase taxes.

A Citigroup spokeswoman noted that the company lost money in 2008 and 2009 and used the losses to offset taxes on profits this year.