NEW YORK (MainStreet) — Twenty-five of last year’s highest-paid corporate CEOs made more than their companies paid in taxes, says a new report from the Institute for Policy Studies (IPS).
According to IPS, the 25 highest-paid CEOs averaged 16.7 million in annual compensation, with 22 of them receiving net pay increases in 2010. In 13 of the companies, these pay increases coincided with either a decline in the corporation’s tax bill or an increase in their tax refund check.
The Institute said that the low tax bills and large refunds could not be attributed to lower profits at those companies, but rather to the use of offshore tax havens and corporate tax breaks.
“Instead of sharing responsibility for addressing our nation’s fiscal challenges, corporations are rewarding CEOs for aggressive tax avoidance,” Chuck Collins, a senior scholar at IPS who co-authored the report, said in a written statement.
Researchers also found that, despite persistent economic woes, CEO salaries are still on the rise across the board: the CEOs of the companies that make up the S&P 500 averaged $10.8 million in overall compensation (including the value of stocks and options) in 2010, a 27.8% increase over the average compensation in 2009.
This bump widened the wage gap between CEO pay and the average U.S. worker’s salary for the first time in three years, going from a ratio of 263-to-1 in 2009 to 325-to-1 in 2010. The new figures are closer to pre-recession numbers than any time since 2007, when the ratio between CEO and worker pay was 344-to-1.
The most profitable of the firms that paid more to their CEOs than to Uncle Sam in 2010 was General Electric (Stock Quote: GE). The company, helmed by Jeff Immelt, received a $3.3 billion tax refund, despite reporting $5.1 billion in pre-tax income in the U.S.
Only one firm on the list, Qwest Communications (Stock Quote: Q) reported negative global returns and only six reported losses in U.S. pre-tax income.