Taking the CEO Pay Fight Local
Join the emerging struggle to leverage the power of the public purse against corporations that reward top execs at worker expense.
In December 2016, the city of Portland, Oregon, adopted the world’s first tax penalty on corporations with extreme gaps between their CEO and worker pay. This landmark move doesn’t set a particular ceiling on CEO pay or dictate how much corporations can pay their executives. But the Portland tax does set a game-changing precedent that potentially turns every level of government into a battleground over corporate pay policies that fuel inequality.
Lawmakers in at least five U.S. states are now considering legislation similar to the Portland tax, and that number will likely start soaring in early 2018 when U.S. corporations begin publicly disclosing the ratio between their CEO and median worker pay. Corporate lobbyists, for their part, are currently pushing to erase the federal legislation and regulations that require this disclosure.
In India, corporate pay ratio disclosure has already begun, and activists in the UK and elsewhere are now organizing for disclosure mandates of their own.
Take action now:
- Call Congress. The U.S. House of Representatives in early June passed broad legislation to deregulate Wall Street — the Financial CHOICE Act — that includes a provision which would repeal the CEO-worker pay ratio disclosure mandate. Urge your senator to block this from becoming law.
- Urge the Securities and Exchange Commission not to delay the new federal corporate pay ratio disclosure regulation. The SEC has re-opened public comment on disclosure mandate. You can also send your own letter to: email@example.com (put “Pay ratio disclosure” in subject line).
Resources on the 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
- Fortune: Donald Trump Needs to Do Something About High CEO Pay
- American Prospect: Corporate Allies in Washington Take Aim at CEO Pay Reform
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, legislation that would give preferential treatment in state contracting to corporations that pay their CEOs no more than 25 times their median worker pay)
- Illinois (HB 3335)
- Connecticut (HB 6373) (The state general assembly is also considering HB 6747, which would disqualify companies with CEO-worker pay ratios of more than 100 to 1 for state subsidies and grants.)
- 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:
A wide range of institutional investors, policymakers, and academics have pressed the SEC for clear and strong federal regulations on CEO pay ratio disclosure. For a full list, see 2017 submissions and 2013/2015 submissions.
- State Treasurers Press SEC Nominee, Congress on CEO Pay Disclosure Rule
- 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