CEOs of some of America’s biggest companies walked away with millions in bonuses after the cost of Trump’s trade war was ‘neutralized’
CEOs of some of America’s biggest companies walked away with millions in bonuses after the cost of Trump’s trade war was ‘neutralized’
Vawn HimmelsbachSun, May 3, 2026 at 9:45 AM UTC
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President Donald Trump shakes hands with Microsoft CEO Satya Nadella while sitting at a table with Apple CEO Tim Cook and Amaazon CEO Jeff Bezos.
After the Supreme Court struck down some of President Donald Trump's tariffs in February, businesses want their money back.
The previous tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), were deemed unlawful (1). And now, many companies are seeking a refund, with U.S. Customs and Border Protection now accepting refund claims (2) for tariffs that roughly total $166 billion (3).
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For CEOs and executives with financial-based bonuses, that's good news. When bonuses are tied to financial targets, a tariff refund could significantly boost their net income.
Some compensation committees are now adjusting executive pay to exclude the impact of tariffs.
For example, the compensation committee for RTX, an aerospace and defense company, said the tariff-cost impact "should be neutralized" for annual bonus payouts because they were "externally imposed, unpredictable and unrelated to operational execution," according to a report by Compensation Advisory Partners (CAP), an executive compensation consulting firm (4).
As a result, RTX CEO Christopher Calio received a bonus of $5.1 million for 2025 — an 85% increase over the previous year's bonus — for a total of $27.7 million in compensation (5).
Other companies that removed tariff costs from calculations used to determine bonuses include Ross Stores and The Gap. Ross Stores CEO James Conroy received $17.4 million, while The Gap CEO Richard Dickson received $17.2 million (6).
But for the average consumer who ultimately paid the price of tariffs there is no refund and not much relief.
Why CEOs are getting millions from tariff refunds
On April 2, 2025, dubbed "Liberation Day," the Trump administration announced a universal 10% tariff on all imported goods, along with country-specific "reciprocal tariffs" on 57 countries, in some cases bringing the total tariff rate as high as 50%.
A tariff is a tax on imported goods paid by the importer. Some companies pass these costs onto the consumer in the form of higher prices for goods and services, while some companies absorb the cost, resulting in reduced profitability.
This had a direct impact on executive compensation, since "many incentive targets, both short-term and long-term, were set based on financial expectations that did not reflect this significant macroeconomic shift," according to the Compensation Advisory Partners (CAP) report (7).
Of 22 companies that CAP reviewed, half didn't reference the impact of tariffs on incentive plan metrics in their proxy statements filed before April 17, 2026. Of the rest, eight boards made adjustments to their annual and/or long-term incentive payouts that "shielded executive pay from the tariff tumult."
Overall, CAP found that, because performance goals had been established prior to the rollout of tariffs, "many companies characterized the negative financial impact as an unforeseen, extraordinary event and applied upward adjustments to incentive plan payouts."
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Why consumers won't likely see any relief
While some CEOs and executives are seeing a windfall from adjustments to their bonus over unlawful tariffs, businesses, not individuals, receive tariff refunds. And that means consumers who've been paying higher prices for goods and services won't get any direct form of compensation.
More than 330,000 importers paid unlawful tariffs on about 53 million shipments (8). The cost burden of tariffs on consumers totalled about $1,680 per household in 2025, according to the Yale Budget Lab (9).
And while there are some exceptions (Costco, for example, is promising to pass on savings to its members in the form of lower prices), consumers shouldn't expect major changes to the prices they see on store shelves.
"Paying those tariffs blew a giant hole in their profit loss statements, and so recapturing those duty payments is really going to be about making their businesses whole," Jackson Wood, director of industry strategy for Descartes' Global Trade Intelligence business unit, told USA Today. "It's unlikely to bring much relief to the U.S. consumer any time soon (10)."
Even when tariffs are removed, prices often remain "sticky," meaning they don't suddenly drop back to pre-tariff levels.
The previous IEEPA tariffs have also been replaced with a 15% global tariff rate — this time implemented under section 122 of the Trade Act of 1974 (11) — which applies to nearly all items imported into the country. Under the legislation, the tariffs expire in 150 days (in this case, the end of July).
The war in Iran could also push inflation higher as fuel costs soar. Rising fuel costs increase the cost of everything from transportation to manufacturing to food. And supply chain disruptions for critical goods such as fertilizer and aluminum create shortages and further drive up costs.
Despite previous tariffs being ruled unlawful, and despite refunds being granted to businesses, consumers may want to prepare for continued uncertainty ahead: cutting non-essential spending, building emergency savings, reducing high-interest debt and diversifying investments to manage risk.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
U.S. Supreme Court (1); U.S. Customs and Border Protection (2); The New York Times (3); Compensation Advisory Partners (4),(7); Fortune (5),(6); Reuters (8); Yale Budget Lab (9); USA Today (10); U.S. Congress (11)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source: “AOL Money”
