Subject:
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CEOs Profit from Layoffs, Pension Shortfalls, and Tax Dodges
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Wed, 27 Aug 2003 00:25:37 GMT
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Viewed:
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485 times
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CEOs Profit from Layoffs, Pension Shortfalls, and Tax Dodges
(PRESS RELEASE FROM UNITED FOR A FAIR ECONOMY & INSTITUTE FOR POLICY STUDIES)
http://www.faireconomy.org/press/2003/EE2003_pr.html
Congress fueled runaway CEO pay and helped U.S. companies avoid paying their
fair share of taxes by blocking proposed stock option reforms ten years ago.
Many corporations have boosted reported profits by not counting stock options as
an expense in their financial statements to shareholders. Those very same
corporations do deduct the value of stock option exercises from their corporate
tax returns, reducing their tax burden. Between 1997 (the year that a proposal
to require expensing of stock options would have taken effect) and 2002, 350
leading firms received an estimated $3.6 billion in tax deductions based on
their CEOs filling their pockets with $9 billion in option gains. A new proposal
to require expensing of options is now under consideration.
This lost federal revenue is about the same amount as the combined 2003 budget
deficits of seven of the top ten largest states (Florida, Illinois,
Pennsylvania, Ohio, Michigan, New Jersey, and Georgia). It also approximates the
amount by which spending on Medicaid in all 50 states exceeded budgeted amounts
in 2003. Corporate taxes? share of federal taxes dropped from 12 percent in 1996
to 8.7 percent in 2001.
At the 24 Fortune 500 companies with the most subsidiaries in offshore tax
havens, median CEO pay over the 2000 to 2002 period was $26.5 million -- 87
percent more than the $14.2 million median three-year pay at firms surveyed by
Business Week.
The top layoff leader in terms of layoff numbers is Carly S. Fiorina at
Hewlett-Packard. She fired 25,700 workers in 2001, and saw her pay jump 231
percent, from $1.2 million in 2001 to $4.1 million in 2002.
Based on the report from the cite above:
http://www.faireconomy.org/press/2003/BosHeraldCEOPay2003.html
I guess what’s interesting is to see who’s NOT tightening their belt when the
economy is bad. It’s not the case that you can keep 25,700 workers employed for
another year with $3 million, but should someone who has laid off that many
workers reap such a reward? That’s not a bonus, that’s over triple her generous
salary of the year before. What of the possible stockholders? What justifies
this windfall for the few at the expense of nearly everyone else?
Some of us have to work for corporate america to put the bacon on the table.
But I would personally invest money elsewhere -- and I bet I am not alone in
this assessment of things, and that’s not good for the economy in the long-term.
We have grown a corporate culture acclimated to looting from workers, local and
federal govt., and the very investors that make it all possible in the first
place.
The U.S. is going down. You might as well take a comfortable seat.
-- Hop-Frog
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