So ITEP describes the numbers as reductions in taxes, not the reduction in taxable income. The former is the latter times a tax rate. I looked for the $1.1 billion in J.P.Morgan Chase’s 2018 10-K. It’s on page 210. "Income tax benefits related to share-based incentive arrangements recognized in the Firm’s Consolidated statements of income for the years ended December 31, 2018, 2017 and 2016, were $1.1 billion, $1.0 billion and $916 million, respectively. The following table sets forth [ ] the actual income tax benefit related to tax deductions from the exercise of the stock options." The table shows $75 million for 2018. So it’s clear that $1.1 billion was the reduction in taxable income and $75 million was the reduction in tax. Why did ITEP claim a reduction in taxable income as a reduction in tax? $75 million would have put J.P.Morgan #25 or off the list. By the way, $75 million is only 6.8% of $1.1 billion, whereas the main corporate tax rate is 21%. I can’t reconcile the difference. Perhaps the $1.1 billion includes some incentive compensation other than nonqualified stock options. The 10-K refers to such plans (RSU and PSU).
Also relevant to my recent posts about employee stock options is the following on page 209 of the 10-K: “The Firm’s policy for issuing shares upon settlement of employee share-based incentive awards is to issue either new shares of common stock or treasury shares. During 2018, 2017 and 2016, the Firm settled all of its employee share-based awards by issuing treasury shares.” In other words, J.P.Morgan Chase used what I labeled Method 2 here, a method none of ITEP’s articles mention.
The tax break amount ITEP shows for Amazon (#1) matches its 10-K and is a reduction in tax. Ditto for Facebook (#5). I didn't find ITEP's number for Google (#4) in its 10-K. So there doesn't appear to be a systematic error.