Disney extends CEO Iger’s tenure by 15 months to June 2016

Monday, July 1st, 2013 | Finance News

LOS ANGELES (Reuters) - Walt Disney Co on Monday extended Bob Iger's tenure as its chief executive by 15 months, allowing him to remain both CEO and chairman through June 30, 2016.

Iger, 62, had planned to step down as CEO on April 1, 2015, and assume the single role as executive chairman through the end of his existing contract on June 30, 2016, the company said in a statement.

Since taking over as CEO in 2005, Iger has overseen acquisitions of film studios Pixar and Marvel, two hit makers for Disney, as well as last year's purchase of "Star Wars" creator Lucasfilm. The company also invested in theme parks and expanded the Disney brand into international markets.

Disney has delivered a total shareholder return of 193 percent during Iger's tenure, exceeding the 54 percent from the S&P 500, Orin Smith, Disney's independent lead director, said in a statement.

The terms of Iger's existing contract remain in place, Disney said.

Disney shares rose 1.2 percent to close at $63.93 on the New York Stock earlier on Monday before the news of Iger's extended CEO contract.

(Reporting by Ronald Grover and Lisa Richwine; Editing by Gary Hill, Bernard Orr)


For U.S. corporate giants, taxes are far below top rate: study

Monday, July 1st, 2013 | Finance News

By Patrick Temple-West

WASHINGTON (Reuters) - For U.S. corporations the top federal income tax rate is 35 percent, but large, profitable companies on average paid only about a third of that in 2010, a report by the investigative arm of Congress said on Monday.

As corporate lobbyists seek to preserve business tax breaks and cut the corporate tax rate, the Government Accountability Office said big companies with earnings paid just 12.6 percent of their worldwide income in taxes in 2010.

The GAO report came at a time of tight government budgets and increased attention among lawmakers to corporate tax avoidance in Europe and the United States.

While U.S. companies often complain about the 35 percent top tax rate being among the world's highest, "what they don't like to admit is that hardly any of them pay anything close to it," said Senator Carl Levin, a Michigan Democrat, in a statement.

The GAO report - which did not name specific companies - said that earlier studies had found U.S. companies paid 20 percent to 30 percent of their income in taxes.

But the GAO said public financial statements and new IRS data showed the tax rate for profitable corporations was even lower.

Levin released a report in May detailing corporate tax avoidance by Apple Inc . Last year, he scrutinized Microsoft Corp's low tax bills.

Democratic President Barack Obama and some lawmakers have called for lowering the top 35 percent corporate tax rate.

In April, GAO published a report saying the annual cost of corporate tax breaks to the U.S. Treasury has more than doubled to $180 billion since 1987.

(Editing by Kevin Drawbaugh and Steve Orlofsky)


Exclusive: State attorneys general probing American, U.S. Airways merger

Monday, July 1st, 2013 | Finance News

By Diane Bartz and Karen Jacobs

WASHINGTON (Reuters) - A group of 19 attorneys general, led by Texas, has joined a U.S. Justice Department probe of a planned merger of American Airlines Inc and US Airways Group Inc , three sources close to the discussions told Reuters.

Some of the states involved worry that they will lose a hub because of the planned transaction, which would create the world's largest airline, while others are concerned about service cutbacks to smaller cities because of the transaction, two sources said.

US Airways has hubs in Philadelphia, Charlotte, Washington, DC and Phoenix while American has hubs in Dallas/Fort Worth, New York, Miami, Chicago and Los Angeles.

US Airways announced on February 14 that it planned to merge with American, which is emerging from bankruptcy, in an $11 billion stock deal. The companies hope to wrap up the merger by the end of September.

The state attorneys general are working with the Justice and Transportation Departments, both of which must approve the deal.

A sticking point in talks between the Justice Department and the companies is whether the airlines will agree to sell slots - takeoff and landing rights - to reduce their dominance at Reagan National Airport outside Washington, D.C., according to two sources.

The involvement of the state attorneys general and the fact that the Justice Department is taking depositions indicates broad concern that the proposed merger creates antitrust problems, antitrust experts said.

The Justice Department can approve a deal on condition of asset sales or, rarely, will sue to stop it. It can also approve a deal without any conditions.

All sources spoke privately to protect business relationships.

Texas is leading the state effort, two sources said. The other attorneys general involved are from Arkansas, Arizona, California, Washington DC, Florida, Iowa, Illinois, Minnesota, Mississippi, Nebraska, New York, Oklahoma, Pennsylvania, South Carolina, Tennessee, Virginia, Wisconsin and West Virginia.

Service to smaller cities has been curbed in recent years as tough economic times and high fuel costs have spurred major carriers to pare flying to unprofitable markets and focus more on big cities. For example, Delta Air Lines Inc last month said it would scrap a hub in Memphis that it gained when it bought Northwest in 2008.

A focal point of the Justice Department has been Reagan National Airport, just outside Washington, DC.

If the deal is approved, the new airline would have 68 percent of the slots at Reagan, far more than Delta Air Lines with 12 percent, United Airlines with 9 percent and the 11 percent held by other airlines, according to a report by the U.S. Government Accountability Office.

The companies have pushed back hard against any suggestion that takeoff and landing slots at Reagan National be sold.

US Airways CEO Doug Parker told lawmakers in congressional testimony last month that requiring the combined company to surrender slots could mean fewer flights to small- and medium-sized cities.

(Reporting by Diane Bartz; Editing by Gary Hill, Bernard Orr)