Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
California CEO Tax Bill Stalls In State Senate
Author: Scarinci Hollenbeck, LLC
Date: June 9, 2014
Key Contacts
Back
A California measure that would have tied the state tax rate on publicly traded companies to the ratio between the CEO’s salary and that of the median worker stalled in the state’s Senate, according to the Associated Press.
The measure would have decreased the tax rate in the state – currently 8.84 percent of net income for businesses and 10.84 percent for banks – to 7 percent for any company whose CEO is paid less than 25 times the median salary of a worker in that company, the news source explained. Companies that pay their chief executive more than that would see an increasing tax rate on a sliding scale, passing the current tax rate when the CEO’s pay exceeds 100 times the median pay. The top tax rate would come to 13 percent for companies in which the CEO is paid more than 400 times the median salary of its employees.
“This is not to vilify those individuals,” said Sen. Mark DeSaulnier, D-Concord, before the vote. “They work hard. They are creative. But from a historical standpoint, this is not a sustainable model for us to maintain. Income inequality is a huge threat to California’s economic growth and stability.”
DeSaulnier noted the difference between this ratio today and 30 years ago, citing two CEOs of Disney, according to the Associated Press. Former Disney CEO Michael Eisner received a salary of $750,000 in 1984, a figure that was approximately 37.5 times the salary of the “typical worker.” By contrast, Robert Iger, the current CEO of Disney, receives a salary of $34.3 million, approximately 974 times the median pay of a Disney employee.
Katie Orr, the state government reporter for Capital Public Radio, reported that DeSaulnier was not able to get the votes needed to pass the bill. Numerous business groups opposed the bill on the grounds that it would drive business away from the state and dramatically increase corporate taxes, and several in DeSaulnier’s own party voted against the bill.
Sen. Steve Knight, R-Palmdale, said that the bill was “un-American,” and that governments should not tell companies what to do, according to the Associated Press.
If you have any questions about this post or would like to discuss your company’s tax,trust, and estate matters , please contact me, Frank L. Brunetti at ScarinciHollenbeck.com.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
California CEO Tax Bill Stalls In State Senate
Author: Scarinci Hollenbeck, LLC
A California measure that would have tied the state tax rate on publicly traded companies to the ratio between the CEO’s salary and that of the median worker stalled in the state’s Senate, according to the Associated Press.
The measure would have decreased the tax rate in the state – currently 8.84 percent of net income for businesses and 10.84 percent for banks – to 7 percent for any company whose CEO is paid less than 25 times the median salary of a worker in that company, the news source explained. Companies that pay their chief executive more than that would see an increasing tax rate on a sliding scale, passing the current tax rate when the CEO’s pay exceeds 100 times the median pay. The top tax rate would come to 13 percent for companies in which the CEO is paid more than 400 times the median salary of its employees.
“This is not to vilify those individuals,” said Sen. Mark DeSaulnier, D-Concord, before the vote. “They work hard. They are creative. But from a historical standpoint, this is not a sustainable model for us to maintain. Income inequality is a huge threat to California’s economic growth and stability.”
DeSaulnier noted the difference between this ratio today and 30 years ago, citing two CEOs of Disney, according to the Associated Press. Former Disney CEO Michael Eisner received a salary of $750,000 in 1984, a figure that was approximately 37.5 times the salary of the “typical worker.” By contrast, Robert Iger, the current CEO of Disney, receives a salary of $34.3 million, approximately 974 times the median pay of a Disney employee.
Katie Orr, the state government reporter for Capital Public Radio, reported that DeSaulnier was not able to get the votes needed to pass the bill. Numerous business groups opposed the bill on the grounds that it would drive business away from the state and dramatically increase corporate taxes, and several in DeSaulnier’s own party voted against the bill.
Sen. Steve Knight, R-Palmdale, said that the bill was “un-American,” and that governments should not tell companies what to do, according to the Associated Press.
If you have any questions about this post or would like to discuss your company’s tax,trust, and estate matters , please contact me, Frank L. Brunetti at ScarinciHollenbeck.com.