Checking Elon’s W-2… Over the past three years, top public companies reported paying $2.1B in taxes to cover executive pay (up more than 4X from 2019). Typically, corporations can deduct worker pay as a business expense when filing their taxes. For decades, companies could write off multimillion-dollar paychecks for high-performing, high-earning execs (and save on taxes). But the 2017 tax overhaul forced companies to pay the 21% corporate tax rate on all paychecks over $1M. Now companies are paying big bills on their execs’ big paydays:
Payday… Corporate tax liabilities haven't stopped exec pay from swelling. Last year, CEOs of S&P 500 companies earned $18.3M in compensation (think: salary, bonuses, stock) on average — 324X more than average workers. And while typical worker pay ticked up 5% (behind inflation), CEO pay jumped 18%.
Paychecks are only part of the payday… About 83% of big CEOs’ comp comes from stock awards. While legislators expect the new tax rule will raise $9.2B in revenue over a decade, not much has been done to address the fact that the wealthy often pay little to no income taxes compared to their net worth. Because while income is taxed, net worth isn't.