For Immediate Release
CEOs Pushing Austerity Enjoy Taxpayer-Subsidized Pay
New report shows that while ‘Fix the Debt’ executives call for cuts to Social Security, Medicaid, and more, they continue to benefit from subsidized pay
WASHINGTON - Ordinary taxpayers are subsidizing exorbitant executive pay at the corporations leading the push for austerity in the budget debate, according to a new report by the Institute for Policy Studies and Campaign for America’s Future.
The report is the first to put a price tag on the tax breaks specific corporations have enjoyed from a loophole that allows unlimited deductions for executive stock options and other “performance-based” pay. It focuses on corporate members of Fix the Debt, a lobby group that is calling for “shared sacrifice” while quietly advocating for cuts to Social Security and more corporate tax breaks.
Among the key findings from the report ‘Fix the Debt’ CEOs Enjoy Taxpayer-Subsidized Pay:
• The 90 publicly held corporate members of the ‘Fix the Debt’ lobby group raked in at least $953 million — and as much as $1.6 billion — from the “performance pay” loophole between 2009-2011.
• UnitedHealth Group enjoyed the biggest taxpayer subsidy for its CEO pay largesse during this period. The nation’s largest HMO paid CEO Stephen Hemsley $199 million in total compensation, of which at least $194 million was fully deductible “performance pay.” That works out to a $68 million taxpayer subsidy – just for one individual CEO’s pay. A just-released proxy reveals that Hemsley pocketed another $28 million in “performance pay” in 2012, which computes into a tax break for UnitedHealth of nearly $10 million.
• Discovery Communications stood next in line for a government handout. CEO David Zaslav pocketed $114 million in total compensation, $105 million of this in exercised stock options and other fully deductible “performance pay.” That translates into a $37 million taxpayer subsidy.
• Caesars Entertainment has hemorrhaged money in recent years, driving CEO Gary Loveman’s stock options underwater. Despite his poor performance, Loveman has managed to take home $9.6 million in cash bonuses, generating taxpayer subsidies the firm can cash in to lower its taxes in years to come.
“These CEOs are raking in huge taxpayer-funded bonuses at the same exact time they’re insisting on deep cuts in the government programs that benefit ordinary Americans,” said Sarah Anderson, a report co-author and Global Economy Project Director at the Institute for Policy Studies.
“If Fix the Debt’s CEOs really wanted to fix the debt, they wouldn’t be lobbying for lower tax rates – even as they take advantage of tax loopholes that allow their companies to pay them incredibly lavishly,” said Roger Hickey, co-director of the Campaign for America’s Future. “This study shows that Fix the Debt’s CEOs have gotten huge tax breaks, which calls into question their legitimacy. Clearly they want austerity for hard working Americans, but no sacrifices at all for CEOs.”
The report is online: http://ourfuture.org/FixTheDebtCEOs
The Campaign for America's Future (www.ourfuture.org) is a center for ideas and action that works to build an enduring majority for progressive change. The Campaign advances a progressive economic agenda and a vision of the future that works for the many, not simply the few. The Campaign is leading the fight for America's priorities – for good jobs and a sustainable economy, and for strengthening the safety net.
Institute for Policy Studies (IPS-DC.org) has conducted path-breaking research on executive compensation for 20 years. The 2012 edition of their annual Executive Excess report received significant media coverage, including in the Wall Street Journal and New York Times. IPS has also produced detailed analyses of the tax and executive retirement policies of Fix the Debt member corporations.
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