These US Companies Pay Executives More Than They Pay in Taxes

A string of companies pay more in annual salaries to their top executives than they hand over in taxes each year, according to a new report.

The Institute for Policy Studies and Americans for Tax Fairness analyzed executive pay data for what it describes as "some of the country's most notorious corporate tax dodgers," finding that 64 firms paid more to their top five executives than they did in U.S. taxes in at least two of the five years studied.

And, based on information from the Institute on Taxation and Economic Policy, the research found that 35 U.S. companies paid less in federal income taxes between 2018 and 2022 than they allegedly paid out to their top brass.

"Lavish corporate compensation packages and inadequate corporate tax payments are not unrelated phenomena," the report reads, which is authored by Sarah Anderson, Zachary Tashman and William Rice.

"Executives are in part reaping rewards for the corporate tax avoidance strategies they pursue, and corporate boards have more money to spend on their highest-paid employees when they don't have much or anything to pay in taxes. Until this self-reinforcing cycle is broken, we'll have a corporate tax and governance system that works for top executives—and no one else."

The top 10 companies listed in the report are:

Tesla
5-year executive pay: $2.5 billion
5-year U.S. profit: $4.4 billion
5-year federal income tax: -$1 million (0.0 percent)

T-Mobile
5-year executive pay: $675 million
5-year U.S. profit: $17.9 billion
5-year federal income tax: -$80 million (-0.4 percent)

Netflix
5-year executive pay: $652 million
5-year U.S. profit: $15.1 billion
5-year federal income tax: $236 million (1.6 percent)

American International Group
5-year executive pay: $406 million
5-year corporate U.S. Profit: $17.7 billion
5-year federal income tax: $385 million (2.2 percent)

Ford Motor
5-year executive pay: $355 million
5-year corporate U.S. profit: $7.8 billion
5-year federal income tax: $121 million (1.5 percent)

NextEra Energy
5-year executive pay: $325 million
5-year corporate U.S. profit: $24.0 billion
5-year federal income tax: $287 million (1.2 percent)

Darden Restaurants
5-year executive pay: $120 million
5-year corporate U.S. profit: $3.6 billion
5-year federal income tax: $28 million (0.8 percent)

MetLife
5-year executive pay: $240 million
5-year corporate U.S. profit: $11.7 billion
5-year federal income tax: $96 million (0.8 percent)

Duke Energy
5-year executive pay: $181 million
5-year corporate U.S. profit: $15.6 billion
5-year federal income tax: -$1.2 billion (-7.9 percent)

FirstEnergy
5-year executive pay: $121 million
5-year corporate U.S. Profit: $6.7 billion
5-year federal income tax: -$44 million (-0.7 percent)

A spokesperson for FirstEnergy told Newsweek that the company "pays taxes in compliance with federal, state and local tax laws," and said it also pays "hundreds of millions in state, local and payroll taxes every year."

"Our executive compensation programs are carefully designed to attract, retain, focus and reward our talented and diverse executive team," the spokesperson continued.

Newsweek has reached out to all companies mentioned in this article via email, with the exception of Tesla, which dissolved its press department in 2020. Netflix and Duke Energy were contacted for comment via the contact forms on their websites.

The Institute for Policy Studies has also urged Congress to hike corporate tax to 28 percent, up from 21 percent, saying the move would generate $1.3 trillion in new revenue throughout the next decade. The report also encourages Congress to crackdown on tax havens, as well as "closing loopholes" and "eliminating wasteful tax breaks."