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Portland Adopts Surcharge on C.E.O. Pay in Move vs. Income Inequality
Key Excerpts from Article on Website of New York Times
Posted: April 16th, 2017
https://www.nytimes.com/2016/12/07/business/economy/portland...
Moving to address income inequality on a local level, the City Council in Portland, Ore., voted on Wednesday to impose a surtax on companies whose chief executives earn more than 100 times the median pay of their rank-and-file workers. The surcharge, which Portland officials said is the first in the nation linked to chief executives pay, would be added to the citys business tax for those companies that exceed the pay threshold. Under the new rule, companies must pay an additional 10 percent in taxes if their chief executives receive compensation greater than 100 times the median pay of all their employees. Companies with pay ratios greater than 250 times the median will face a 25 percent surcharge. The tax will take effect next year, after the Securities and Exchange Commission begins to require public companies to calculate and disclose how their chief executives compensation compares with their workers median pay. The S.E.C. rule was required under the Dodd-Frank legislation enacted in 2010. Criticism of how much chief executives are paid has risen in recent years as their compensation has grown substantially. A 2014 study ... found that chief executive pay compared with the earnings of average workers had surged from a multiple of 20 in 1965 to almost 300 in 2013. Income inequality is real, it is a national problem and the federal government isnt doing anything about it, [said Portland Mayor Charlie] Hales. But local action replicated around the country can start to make a difference.
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