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Originally published November 19, 2014 at 4:50 PM | Page modified November 24, 2014 at 3:23 PM

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CEO pay at Boeing, Ford exceeds companies’ tax bill

Boeing Chief Executive Jim McNerney received total executive compensation of $23.3 million last year, while Boeing received a federal tax benefit of $82 million, a report said.


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Boeing, Ford and Chevron are among 29 U.S. companies whose chief executives were compensated more last year than their corporations paid in federal income taxes, according to a policy and research firm whose mission is challenging corporate influence.

The 29 companies reported $24 billion in U.S. pretax profits and received $238 million in tax benefits, according to the report by the Institute for Policy Studies in conjunction with the Center for Effective Government. That’s an effective tax rate of negative 1 percent, the study said.

The CEOs at those firms were paid $32 million on average last year.

“For corporations to reward one individual, no matter how talented, more than they are contributing to the cost of all the public services needed for business success reflects the deep flaws in our corporate tax system,” the report said. The Institute for Policy Studies (IPS) opposes tax deductibility for executives performance pay.

The report comes as Congress nears the end of its session with an extension of 55 tax cuts headed for renewal, 80 percent of which benefit businesses, the report said. Those reductions include ways that allow firms to pay little or no taxes, according to the report.

A similar report published in 2011 was disputed by the companies mentioned as distorting the U.S. corporate-tax burden.

Boeing, the nation’s biggest exporter, has made the list of companies paying their CEOs more than the government in all three years it has been published. CEO Jim McNerney received total executive compensation of $23.3 million last year, while Boeing had a federal tax benefit of $82 million, the report said.

The company’s total income-tax expense in 2013 was $1.6 billion, according to spokesman Chaz Bickers, much of which was deferred because of investments the company made in airplane development and production.

“We make very significant investments in high-value engineering and manufacturing at Boeing facilities in the U.S., creating jobs designing, developing and producing new airplanes,” Bickers said in an email. “That investment, which happens before we receive sales revenue at delivery, reduces the current portion of our total tax expense.”

Ford and Chevron took second and third place after Boeing among seven of the 30 largest U.S. companies that pay their chief executives more than the federal government.

Chevron’s John Watson received $20.2 million in total executive compensation in 2013, according to the study. The company paid $15 million in income taxes.

Chevron said its U.S. federal income-tax expense last year was “much lower than normal,” due to lower income for U.S. operations.

“This figure needs to be viewed in context to our overall global income-tax liability in 2013 of $14.3 billion, with an effective income tax rate of 39.9 percent,” said Kurt Glaubitz, a company spokesman.

Alan Mulally, who stepped down this year as Ford CEO, was paid $23.2 million in 2013, as the company got a tax benefit of $19 million.

“During the financial crisis, we were in a situation where we faced severe losses, which threatened the company’s very survival,” said Whitney Eichinger, a Ford spokeswoman. “We had to absorb these losses at the worst possible time, and only now does the tax code allow us to use these attributes to offset taxable earnings.”

Executive-compensation data disclosed in the U.S. Securities and Exchange Commission-mandated summary compensation table reports some awards in the year they’re granted rather than for the year they’re earned. Some awards are restricted, vesting over time, and the receipt of others may depend on achieving performance goals in the future.

The disclosure also counts changes in pension and the value of perks.



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