Some companies pay their CEOs more than they pay in U.S. taxes. That's the somewhat sensational conclusion of a study from the Institute for Policy Studies, a Washington, DC think tank. And among them, the IPS says, is Abbott Laboratories' ($ABT) CEO Miles White, a perennial top earner among Big Pharma executives.
According to the IPS, White garnered $19 million in pay for 2011. (That's $5 million less than we figured for our ranking of 2011's top-paid pharma CEOs, but compensation calculations can vary). In any case, White's pay did drop somewhat last year. But his company's 2011 tax bill was far, far smaller.
Abbott actually got a $586 million tax refund, the IPS figures. Their numbers are based on U.S. taxes paid, not including state and local taxes. Foreign tax bills weren't included either. Nor were deferred taxes, which, as Reuters notes, can be much larger than the actual checks companies may write to the IRS.
IPS linked Abbott's low tax bill to its 64 foreign subsidiaries, 16 of them in tax havens. But the point of IPS's study isn't so much that Abbott, or any company, uses every corporate tax break it can find. It's that the U.S. tax code not only grants big credits and deductions to companies, but certain tax breaks that actually foster big-time CEO pay. Performance-based CEO pay is tax-advantaged, for instance, the IPS says.
An Abbott spokesman denied that Abbott got a refund. Instead, he said, the company paid $700 million in federal income tax last year. The IPS figures were based on an accounting adjustment stemming from other tax issues.
Special Report: Miles White -Top 10 Pharma CEO Salaries of 2011
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