Taking the CEO Pay Fight Local
Our current focus campaign is to build on the “Portland Precedent” — the world’s first tax penalty on corporations with extreme gaps between their CEO and worker pay. This ground-breaking law, adopted in December 2016, does not set a ceiling on, or dictate in any way, how much corporations can pay their executives. But it will provide an incentive to reduce executive compensation and lift up pay for workers at the bottom end, while generating revenue for urgent needs. And at least five states are now considering similar legislation.
A new federal disclosure law will make such taxes inexpensive to administer by requiring corporations to report every year on the gap between their CEO and median worker pay. This law went into effect in January 2017 and the first data are to be reported in early 2018. But opponents would like to repeal or delay this law to protect CEOs who may be embarrassed by the information. The Securities and Exchange Commission has re-opened public comment on this regulation.
- Sign a petition to the SEC telling them not to delay this pay ratio disclosure regulation.
- You can also send your own letter to: email@example.com (put “Pay ratio disclosure” in subject line).
Resources on Portland CEO pay surtax:
- Institute for Policy Studies Backgrounder on the Portland CEO-worker Pay Ratio Surtax
- Text of the Portland legislation
- City of Portland Bureau of Revenue assessment of the legislation
- List of the more than 500 publicly traded businesses that “do business” in Portland that may be subject to the surtax.
Media coverage of the CEO pay surtax and other similar proposals:
- New York Times: Portland Adopts Surcharge on CEO Pay in Move vs. Income Inequality
- The Nation: This City Just Came Up With a Novel Way to Fight Inequality: Taxing Corporations With Extreme Pay Gaps
- Fast Company: Why Portland’s Tax On CEO Pay Matters
- Inequality.org: Historic CEO Pay Tax Passes in Portland
- Moyers & Company: Local Governments Aren’t Waiting for a Federal Fix for Runaway CEO Pay
- Bloomberg: CEO Pay Targeted in San Francisco, Rhode Island
- Bloomberg: Income Inequality Battle Brewing At State-Level
Pending legislation for CEO-worker pay ratio taxes:
- Minnesota (HF 65)
- Rhode Island (H. 5141 and S. 0318) (The RI state senate is also considering S. 0211, which would give preferential treatment in state contracting to corporations that pay their CEO no more than 25 times their median worker pay)
- Illinois (HB3335)
- Connecticut (HB 6373)
- Massachusetts (S. 1555)
- Federal legislation: CEO Accountability and Responsibility Act (H.R. 6242)
Letters to the SEC in support of CEO-worker pay ratio disclosure:
- Rep. Keith Ellison, et al., Members of Congress
- Senator Robert Menendez and 8 other senators
- Senator Tammy Baldwin
- 100 investors representing $3 trillion in assets under management
- Network for Sustainable Financial Markets
- Religious Society of Friends
- SharePower Responsible Investing, Inc.
- Trillium Asset Management
- US Social Investment Forum
- Walden Asset Management
- Lynne Dallas, Professor of Law, University of San Diego
- Sue P. Ravenscroft, Roger P. Murphy Professor of Accounting, Iowa State University
- Institute for Policy Studies