32 Corporations Spent More On Compensation For Top Executives In 2010 Than They Paid In Income Taxes

Over the last few decades, executive pay at large corporations has skyrocketed. Today, American CEOs make 263 times the average compensation for American workers, up from the 30 to 1 ratio in the 1970s. In 2010 alone, CEO pay went up 27 percent while average worker pay went up just 2 percent.

At the same time, corporate tax revenue has plunged to historic lows. During the 1960s, for instance, the United States consistently raised nearly 4 percent of GDP in corporate revenue. During the 1970s, the total was still above 2.5 percent of GDP. But the U.S. now raises less than 1.5 percent of GDP from the corporate income tax.

According to a new report called “S.& P. 500 Executive Pay: Bigger Than …Whatever You Think It Is,” put together by the independent research firm R. G. Associates, there are currently 32 companies that actually spent more on compensation for their top executives in 2010 than they paid in corporate income taxes:

Total executive pay increased by 13.9 percent in 2010 among the 483 companies where data was available for the analysis. The total pay for those companies’ 2,591 named executives, before taxes, was $14.3 billion…Warming to his subject, Mr. Ciesielski also determined that 158 companies paid more in cash compensation to their top guys and gals last year than they paid in audit fees to their accounting firms. Thirty-two companies paid their top executives more in 2010 than they paid in cash income taxes.

This isn’t really surprising when you consider that several of the largest U.S. corporations simply paid no taxes at all last year. General Electric, for instance, made more than $5 billion last year, but had a tax rate of -64 percent, meaning it received billions in tax benefits. Boeing hasn’t paid any federal income tax in three years, while CEO Jim McNerny made $19 million last year.

At the moment, a slew of multinational corporations — who already pay exceedingly low taxes — are lobbying for yet another tax boondoggle that would cost the government nearly $80 billion in revenue over the next ten years. With corporate taxes already so low, and corporations flush with cash and paying tens of millions to their CEOs, there’s little reason to grant these huge companies yet another giant tax giveaway.

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WWDC 2010 Journal, Day 0

By Mike Morton, Google Mac Team

As regular readers know, every year, Google engineer Mike Morton becomes intrepid reporter Mike Morton as he ventures to Apple's Worldwide Developer Conference in San Francisco. Except for the contents of Steve Jobs's keynote address, Apple doesn't allow attendees to disclose the technical bits of the conference, so he writes about other important observations and details, such as flights, food, lines, and plans (successful and otherwise). Here's the first part of Mike's 2010 journal.

Summer is here, and that means ice cream, hay fever, swimming in the pond, and — for people who develop Apple software — the annual gathering of the faithful called the Worldwide Developer Conference, known as WWDC to everyone.

I planned a short hop from my New Hampshire home down to Boston’s Logan airport, then to San Francisco just in time to get a few hours of sleep and head to the conference on Monday. Developers want to be in line early for the Steve Jobs keynote, because… well, actually, I don’t know why. We just always do. Some want to sit up front, but good camerawork and big screens throughout the room mean you can see from anywhere.

To my amazement, one die-hard Apple developer emailed me today that he plans to skip the keynote, and instead go eat pancakes and watch the live-blogging. (I won’t name him, because I worry he’ll lose friends over this.) He’s just tired of waiting in long lines. Personally, I enjoy the line. It's a chance to catch up with people, to see and be seen.

As I write this from my transcontinental flight, it’s about 11 PM Pacific Time, and we’re going to land around 1:15 AM. I think that’s 4:15 AM on my biological clock, which is the time I normally wake up. We’ll see how much sleep I get when I check in to the hotel.

One big discussion point this year: some Mac engineers have grumbled that Apple’s schedule of sessions seems tilted toward iPhone and iPad — and away from Mac OS X. Me, I see at least two sessions I want to attend in nearly every time slot, so I’m happy, no matter what the overall emphasis.

Time to see if I can catch some sleep before we land.

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WWDC 2010 Journal, Day 1

By Mike Morton, Google Mac Team

Google engineer Mike Morton is doing his annual blogging from Apple's Worldwide Developer Conference in San Francisco. Today we get Mike's insights on WWDC keynote day, with all the fun and reality distortion it brings.

It’s 10 PM Monday. I’ve had six hours sleep in the last 48 hours and am verging on delirium, but it’s a happy kind of delirium. I got a good dose of Reality Distortion today (“a few molecules of Steve Jobs” as one developer said as he settled in for the keynote).

Waiting for the keynote, we got to listen to music, including Satchmo’s Wonderful World, and watch on the big screen as the camera focused on various audience members. Audience folks quickly caught on to the idea that if you put an interesting message on your iPad screen, the camera would find you. The big screen showed iPads saying “This is not a PC”, a New Zealand (I think) flag, “Hi Mom!”, “Free Hugs”, and “Thank you, Steve”. There was one with a job posting for AOL, complete with a Twitter account to contact. Best of all was a set of four iPads spelling W - W - D - C, with the C taking a little extra time to get ready, and the audience cheering when it did. Perhaps presaging the mobile device emphasis of the keynote, one laptop screen just said “MACS TOO!”.

Steve walked on to the usual wild applause and camera frenzy. He looked very thin, but very happy. As he usually does, he began with numbers: the number of developers attending and how many countries they're from (5,200 and 57) and the number of days it took to sell out the conference (8 despite the fact that "this is the biggest place we can get!"). He talked about the iPad working its magic on sales numbers, and the large numbers of iPad-native apps, as opposed to iPhone apps which work on the iPad in a compatibility mode.

You’ve probably read a lot about the keynote already, so here are some moments that stood out for me:

Steve talked about the App Store. He indirectly addressed complaints about apps being rejected or waiting for approval, listing various good reasons that apps have problems, although some in the audience thought the list of reasons provided might be incomplete.

He invited three iPhone developers up to talk about their products: NetFlix, Zynga (the Farmville folks), and Activision, whose Guitar Hero demo was slick. He wrapped up by telling us that the App Store has hit 5 billion downloads, and has paid $1 billion to developers. Carl Sagan would have been right at home with this billions and billions statistic.

Steve quickly moved to introducing iPhone 4. I was impressed by lots of things, especially the promise of apps that use the new gyroscope hardware. There’ll be some great virtual reality and augmented reality apps coming out of that. I was also intrigued by putting cellular, wifi, and other antennas into the metal around the edge of the case. I hope that’ll improve reception.

iMovie for iPhone looks cool, too, although as a cousin to Final Cut, I wish they had called it Final Tap. It could have gone to 11.

And then came the classic “One more thing”: FaceTime video calls. This is going to be huge. It’ll go viral, selling itself, because it’s so noticeable when someone is using it in public. Plus it’ll drive sales of nose-hair trimmers (note to self: invest now).

Steve showed a video of people talking with FaceTime. This included a very moving moment when a soldier saw his baby on ultrasound via FaceTime. Steve said something I’ve heard him say before: "This is one of those moments that reminds us why we do what we do".

The keynote conspicuously lacked any mention of Mac OS X. Apple may be looking toward the “post-PC era” and even hastening it, but let's hope they don't forget “MACS TOO” any time soon.

For the rest of the day, sitting in darkened lecture rooms was proving too much of a challenge for my jet lag, so I left before the last session. As I walked out, I saw an attendee with a t-shirt reading: “AppKit is the new Carbon”. For the non-geek among you, Carbon is an older system that developers used to program the Mac, and AppKit is the current system. You could say this was another way of declaring "MACS TOO!".

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WWDC 2010 Journal, Day 2

By Mike Morton, Google Mac Team

Google engineer Mike Morton somehow finds time to blog from Apple's Worldwide Developer Conference in San Francisco while also learning, socializing, eating, and occasionally sleeping. Read today's entry for more.

Day 2 had barely begun, and I felt like I’d been here a week. The constant time-juggling is a challenge: attend a session, ask questions in a lab, eat, sleep, work, schmooze? Before heading to Moscone West, I chatted in the hotel lobby with other attendees about the time challenge. One first-timer told me his friends simply suggested he get to as many parties as possible.

I spotted an attendee wearing a “hi, i make macintosh software” t-shirt. I noticed later that “macintosh” is an anagram of “Hm, iOS can’t".

Breakfast at Moscone featured uninspiring food, but inspiring conversation. A friend and I sat at a table with four folks we didn’t know, all with different interests. One was a grad student, doing systems for kids with various disabilities. He asked the accessories engineer if one could build a simple device with just two buttons, for simple apps for his students with motor coordination problems. The accessories guy reached into a bag: “Like this one?”. He showed us Pong running on his iPhone, using the extra hardware to control it!



Last year, the show had a huge display of app icons, each one jiggling each time it was downloaded. This year’s display was different: app icons fell from the top like meteors, one for each download. Popular apps showed their icons over and over. That made it a lot easier to find Google Earth, which I never did spot last year — and Google Mobile seems to be "selling" like hotcakes.



The wifi and cell networks continue to struggle with the load, sometimes failing but usually somewhat usable. Apple staffers did better under load, staying quite pleasant. Some have boring jobs like using a clicker to count attendees entering each session, but they still manage to stay cheerful. I teased one clicker dude: “Don’t you have an app to do that?” He replied he did have a phone app, but that the cheap clicker was easier to use. Low tech sometimes wins.

The Apple Design Awards were noticeably different this year. They didn’t list nominees, but instead just announced each winner. That takes some of the fun out of it, in my humble opinion. More significantly, all the awards were for iPhone or iPad apps — nothing for Mac OS X at all. A bunch of hardworking iPhone developers took home beautiful cubes with a glowing Apple logo and a bunch of hardware, and had their conference costs reimbursed.

As in past years, John Geleynse from Apple demoed each app. This is fun because some apps involve musical skill, artistic ability, game-playing reflexes, and so on. He did pretty well, but joked that the awards committee might be picking apps that he’ll find challenging. And, as in past years, I feel like I should try each of the winning apps, even though there are so many apps, so little time. Perhaps Apple could offer a package deal on the App Store: all the winning apps together, at a discount?

I’m sure the annual Stump The Experts was great [Editor's note: yeah, it was!], but the combined siren song of email backlog and sleep backlog was too great.

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