If It Sounds Too Good to Be True...

I assume that by now, many folks are aware of the hoax press release purportedly from GE declaring that they were going to be ("press release" from BusinessInsider):

...gifting its entire 2010 tax refund, worth $3.2 Billion, to the US Treasury on April 18, Tax Day, and will furthermore adopt a host of new policies that secure its position as a leader in corporate social responsibility.

If you are unaware of the source of the $3.2 Billion figure, this NY Times story from March explains things.

Now, as soon as I saw this "press release" I started looking for the "April Fools" tag. For me, the tells were:

Immelt acknowledged no wrongdoing. “All seven of our foreign tax havens are entirely legal,” Immelt noted. “But Americans have made it clear that they deplore laws that enable tax avoidance.

and

In tandem with the gift, the company is also announcing a host of new policies to restore public faith in the GE brand, including a commitment to keep American jobs in America, and to create one U.S. job for each new job created abroad.

Other folks (like emptywheel) who saw it had their own tells of course but those two really jumped out at me. Earlier this month (April 4) the NY Times Economix blog had a post on Tax Havens...

Our budget deficit would be smaller – and pressure to cut social programs lower – if corporate tax revenues had not declined over time relative to gross domestic product and relative to individual income tax revenues.

Corporate America is a world leader in creative tax minimization. As David Kocieniewski reported in The New York Times, General Electric used some particularly innovative strategies to take advantage of overseas tax havens, including “offshore profit-shifting.”

The Boeing Corporation, a major federal contractor, has had a net rebate in federal taxes over the last three years, and a total tax rate of 4.5 percent over the last five years, though the company points to pension contributions and research credits that have reduced the bill.

In 2008, the Government Accountability Office reported that 83 of the 100 largest publicly traded corporations in the United States had subsidiaries in jurisdictions listed as tax havens; it cautiously emphasized that this did not prove that their decisions to locate there were motivated by tax minimization.

My bold.

All of this is going on at the same time that CEO pay is once again going through the roof. Just since Sunday April 10, the NY Times has had three different articles on CEO compensation. Gretchen Morgenson on Sunday had this:

As investors scan corporate proxy statements this spring and prepare to vote in annual elections for company directors, executive pay is again moving to center stage. After a few years in the wilderness, top executives are getting hefty raises, according to Equilar, a compensation analysis firm in Redwood City, Calif. But while outrage over executive pay has been eclipsed in recent years by anger over the causes and consequences of the financial crisis, compensation issues still resonate among many investors.

Also on Sunday was this Times story:

HAPPY days are back — in the corner office, at least.

After shrinking during the 2008-9 recession, paychecks for top American executives are growing again — in many cases, significantly so.

Rarely has the view from the corner office seemed so at odds with the view from the street corner. At a time when millions of Americans are trying to hang on to homes and millions more are trying to hang on to jobs, the chief executives of major corporations like 3M, General Electric and Cisco Systems are making as much today as they were before the recession hit. Indeed, some are making even more.

The disparity is especially stark as companies are swimming in cash. In the fourth quarter, profits at American businesses were up an astounding 29.2 percent, the fastest growth in more than 60 years. Collectively, American corporations logged profits at an annual rate of $1.678 trillion.

So far, this recovery has not trickled down. After two relatively lean years, C.E.O.’s in finance, technology, energy and beyond are pulling down multimillion-dollar paychecks. What many of these executives aren’t doing, however, is hiring. Unemployment, although down from its peak, stood at 8.8 percent in March. And few economists predict the jobless rate will drop substantially anytime soon.

On Monday, the Times had this article on Gannett:

Just in case Gannett employees thought 2011 might bring better news after years of layoffs and furloughs, the year was just four days old when a note landed in the in-box of people who work for the community news division saying, once again, they were required to take an unpaid week off.

After explaining that revenues at the newspaper giant continued to be soft and the outlook was uncertain, Robert J. Dickey, Gannett’s president of U.S. Community Publishing, said, “I know furloughs are very hard on you and your families and I thank each of you for the continued commitment and great work.”

Mr. Dickey made it clear that not only did the company’s executives feel their pain, they would share the sacrifice, noting that he too would take a furlough and that Craig A. Dubow, the chief executive, and Gracia C. Martore, the president and chief operating officer, “each will be taking a reduction of salary that is equivalent to a week’s furlough.”

But as it turns out, the buck stopped just short of Mr. Dubow and other executives. Mr. Dubow had agreed to lower his salary by 17 percent through 2011, but then again, last month he received a cash bonus of $1.75 million for 2010 and Ms. Martore received $1.25 million. For 2010, they were also awarded stock, options and deferred compensation that would bring their combined packages to $17.6 million if the company and its stock hits certain targets.

CNN had this gallery post on the Top Twenty highest paid CEOs for 2010. First on the list is Phillippe Dauman of Viacom at $84.5M total compensation split between $14M in cash and $70.5 in stock and options. Number 20 on the list is Robert Stephens of Lockheed-Martin at $12.1M cash and $7.1M stock and options. The total cash for these Top 20 adds up to $215.6M with a low of $3.9M to a high of $35.9M for an average of $10.78M. That is just the cash compensation for 20 CEOS for 2010.

How many jobs could be created if those (and all other) CEOs (and senior executives) had cash payments capped at $1M per year? If we took $195M and divided it by $75K ($50K salary and $25K benefits), this would be 2.6k jobs. Twenty CEOs cash compensation could fund two thousand six hundred jobs and each of these CEOs would still receive $1M cash plus their stock and options.

Now where's that "shared sacrifice" we keep hearing about? Is it when the banksters and other businesses whine about the minimal regulations they are being asked to live with? Via Reuters:

Large companies have argued for a generous exemption because they use derivatives mainly to hedge risk from swings in raw-material prices or fluctuations in interest rates, insisting they do not risk destabilizing the financial system.

But confusion over what Congress intended has effectively left it up to the CFTC -- a once-obscure agency thrust into prominence by financial reform legislation enacted last year -- to determine what happens to end-users and whether they must post margin.

The cost could be staggering. A study by a coalition of business groups, including the U.S. Chamber of Commerce, estimated a 3 percent margin requirement on swaps used by Standard & Poor's 500 companies could cut capital spending by $5.1 billion to $6.7 billion and cost up to 130,000 jobs.

For U.S. utilities alone, a margin requirement on all over-the-counter swaps would affect cash flow by $250 million to $400 million a year for each company, the Edison Electric Institute, a Washington trade group, has estimated. It said that would be "dead money" funded by its members.

I guess sacrifice is like taxes and only for the "little people."

And because I can: