Report Released: Executive Excess 2008: How Average Taxpayers...
PRESS RELEASE - August 25, 2008
NEW REPORT FINDS $20 BILLION IN TAX SUBSIDIES FOR EXCESSIVE EXECUTIVE COMPENSATION;
15TH ANNUAL LABOR DAY 'EXECUTIVE EXCESS' REPORT
Boston and Washington, D.C. - A new report finds that U.S. taxpayers subsidize excessive executive compensation by more than $20 billion per year.
The report is available via the web at: http://faireconomy.org/files/executive_excess_2008.pdf
The 15th annual 'Executive Excess' report from the Institute for Policy Studies and United for a Fair Economy calculates the annual cost to taxpayers of the following tax and accounting loopholes that encourage excessive executive pay:
1. Preferential capital gains treatment of carried interest ($2.6 billion)
2. Unlimited deferred pay ($80.6 million)
3. Offshore deferred compensation ($2.1 billion)
4. Unlimited deductibility of executive compensation ($5.2 billion)
5. Stock option accounting double standard ($10.0 billion)
"These loopholes allow top executives to avoid paying their fair share of taxes. As a result, ordinary taxpayers wind up picking up the bill," explains report co-author and IPS Associate Fellow Sam Pizzigati.
Members of Congress have attempted to plug each of these five loopholes, but their efforts have stalled in the face of strong opposition from corporate lobby groups.
The Presidential race is shining a brighter spotlight on the issue, as both candidates have attacked excessive executive compensation on the campaign trail. And yet the report points out that neither Obama nor McCain has yet endorsed all the major reforms needed to eliminate subsidies for executive pay.
"It's outrageous that our tax dollars are inflating executive paychecks," says Institute for Policy Studies fellow Sarah Anderson, a lead author of the annual Executive Excess reports for the past 15 years. "Surely in these troubled economic times we can find better ways to spend our nation's wealth."
ADDITIONAL KEY FINDINGS:
CEO-WORKER PAY GAP: CEOs of large U.S. companies last year averaged $10.5 million each in total compensation, 344 times the pay of the average U.S. worker. The top 50 private equity and hedge fund managers pocketed an average of $588 million each, or 19,000 times as much as average workers.
IF CURRENT TRENDS CONTINUE: The gap between CEO and average worker pay will grow wider since industries that are adding the most jobs have far wider pay gaps than those that are losing the most jobs. Labor law reforms are needed to help more workers exercise their right to bargain collectively for fair compensation.
INDIRECT TAXPAYER SUPPORT FOR RUNAWAY PAY: Additional billions of taxpayer dollars indirectly encourage excessive executive pay through government contracts and bailouts that allow unlimited CEO compensation. The report documents that 85 percent of top federal contractors paid their CEOs over 100 times the pay of average U.S. workers in 2007.
Authored by Sarah Anderson, John Cavanagh, Chuck Collins, Sam Pizzigati, and Mike Lapham, Executive Excess 2008 is the 15th annual CEO pay study by the Institute for Policy Studies and United for a Fair Economy.
The Institute for Policy Studies is an independent center for progressive research and education in Washington, DC (www.ips-dc.org). Boston-based United for a Fair Economy is a non-partisan organization that spotlights growing economic inequality (www.faireconomy.org).
For hard copies or to set up interviews with the co-authors, contact:
Sarah Anderson
(202) 234-9382 x227
[email protected]
Bob Keener
(617) 423-2148 x120
(617) 610-6766 (mobile)
[email protected]
