Verizon Communications Inc. may be trying to smooth things over with its union members, but a new report could put a wrench in the negotiations.
According to the Institute for Policy Studies, the telecom giant is among the top 25 companies in the United States that gave its CEO more compensation in 2010 than it paid in federal taxes. The research groups report, Executive Excess 2011: The Massive CEO Rewards for Tax Dodging,” compared CEO pay to current U.S. taxes paid; it excluded foreign, state, local and deferred taxes.
With that in mind, Verizon earned $11.9 billion in pre-tax profits in the United States. It further received a $705 million federal tax refund. Ivan Seidenberg who earlier this year stepped down as CEO earned $18.1 million in compensation, according to the Institute for Policy Studies, which drew its conclusions from Verizons regulatory filings.
Verizon disputes the findings, which were released this week. A spokesman told the New York Times that Seidenberg now Verizons chairman will only earn that full $18 million if the carriers stock rises by the time his bonus vests in three years. However, an Associated Press analysis earlier this year found that Seidenbergs 2010 compensation did rise 4 percent to $18.1 million, a total that included annual salary, a performance-based cash bonus and stock awards. Meanwhile, the spokesman further asserted to the Times that Verizon will pay billions of tax dollars over time, so its short-sighted to hone in on a single year.
Other communications companies that, according to the Institute for Policy Studies, forked out more CEO pay than federal taxes in 2010:
The companies included in the report averaged $1.9 billion each in profits, according to the Institute for Policy Studies. Various loopholes, tax-reduction strategies and shelters, however, let those corporations average $304 million each in tax benefits, the research group said.
The study was released as Verizon, fresh off a costly union strike, is trying to cut the amount of money it subsidizes in employee pensions and health care.