Study: 26 corporations paid more to CEOs than in federal taxes

By Bernie Becker - 08/16/12 12:45 PM ET

More than two dozen large U.S. corporations paid their chief executives more than they handed over to the federal government in taxes in 2011, according to a new report from a liberal group.

The Institute for Policy Studies says, in a study released Thursday, that those 26 chief executives work for companies that average $1 billion in pre-tax income — and are helped along by a tax code, the institute says, that encourages excess executive pay.

For instance, the group argues that rolling back four tax breaks readily used by corporate America could create tens of thousands of jobs in clean energy or education.

“Tax dollars are flowing from average Americans who depend on public services to the kingpins of America’s private sector,” the report says. “They’re subsidizing, directly and indirectly, the mega-million paychecks that go to the top executives at our nation’s biggest banks and corporations.”

The 26 corporations cited in this year’s study is an increase of one from last year, and the institute says that seven corporations — Boeing, Chesapeake Energy, Ford, International Paper, Marsh & McLennan, Motorola Mobility Holdings, and Motorola Solutions — made the list both years.

In general, the group said companies were able to greatly reduce their tax bill by relying on offshore accounts, a credit encouraging research and development, another tax break allowing companies to more quickly write off the cost of new purchases and preferences for energy development.

Boeing, for instance, is a heavy user of the research credit, while AT&T has relied on the write-off provision known as accelerated depreciation. Chesapeake Energy, meanwhile, has leaned on credits for drilling.

Companies cited in the study have questioned the methodology the group used, and also said that their use of certain tax provisions has allowed them to create jobs and investment in the U.S. economy.

The institute used, among other things, salary, bonuses, non-equity compensation and stock values to calculate a chief executive’s earnings.

It used Securities and Exchange Commission filings for how much a company paid in taxes, which don’t include what is paid to state, local or foreign governments and also, some analysts say, is not the best method of tracking exactly what a company pays to the federal government.