Three Pittsburgh companies are among 25 U.S. corporations that paid their CEOs more last year than the company paid in U.S. corporate income taxes, according to a study by the Institute of Policy Studies.
The local companies on the list are Bank of New York Mellon, specialty metals producer Allegheny Technologies and Mylan, which makes generic drugs.
The institute compared CEO pay with the federal tax liabilities companies disclose in their 10-K, an annual report filed with the Securities and Exchange Commission. The institute states the figure is "the best approximation of actual taxes paid to the U.S. Treasury."
The Washington research report examines CEO pay every year. Last year it found the CEOs of companies that announced the largest layoffs earned, on average, 42 percent more in 2009 than the average CEO of an S&P 500 company.
Scott Klinger, a co-author of this year's report, said the tax figure companies disclose in their 10-K "is how much federal taxes cost for the year." When companies owe corporate income taxes, the number they report in the 10-K is positive and reflects what they paid in taxes. When companies are due a refund or credit toward future taxes, they list the number as a benefit.
The report describes the benefit as a refund "because that is the term familiar to most readers."
According to the report:
• Bank of New York Mellon paid CEO Robert P. Kelly $19.4 million in 2010, when the bank recorded a $670 million benefit for federal income taxes.
• Allegheny Technologies paid former CEO L. Patrick Hassey $15 million last year and the company recorded a $47 million federal income tax benefit.
• Mylan paid CEO Robert J. Coury $15 million in 2010 and the company recorded a $73 million benefit for federal income taxes.
Bank of New York Mellon and Allegheny Technologies declined to comment on the report.
Barry B. Langberg, an attorney for Mylan, said: "Mylan did not receive a $73 million federal tax refund for 2010 and there is nothing in the company 10-K that supports such a conclusion."
In 10-K reports for 2010, Bank of New York Mellon reported a $670 million benefit for federal income taxes, Allegheny Technologies reported a $47.3 million benefit and Mylan reported a $72.5 million benefit.
The income tax figures used by the report are the best estimates available, according to Penn State accounting professor J. Edward Ketz. Companies disclose another figure that specifies their overall income tax bill, but he said that number does not specify how much is paid in federal and state income taxes as well as taxes paid to foreign countries.
Mr. Ketz said U.S. companies are allowed to lower their federal income tax liability by deducting tax payments to foreign governments.
"One of the reasons why America is losing jobs is that the tax code provides perverse incentives for moving business overseas," he said.
Len Boselovic: firstname.lastname@example.org or 412-263-1941.