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.
- Practices: Tax and Trusts & Estates, Corporate Transactions & Business
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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
New Jersey’s Revised UHAC Regulations: What Residential Developers Need to Know About Affordable Housing Commitments
New Jersey residential developers with affordable housing obligations should carefully review their existing approvals, development agreements, and proposed deed restrictions in light of the State’s revised UHAC regulations (Uniform Housing Affordability Controls). The regulations, which took effect on November 6, 2025, significantly change the administration and physical requirements for affordable housing units. For developers with […]
Author: Wendy Rubinstein Quiroga
“No Comment” Culture: Why Silence Is Often the Riskiest Legal Strategy
A “no comment” response is sometimes the right call when a legal problem arises. As a blanket policy, however, it lets allegations go unanswered, deadlines pass, evidence disappear, and manageable disputes grow into expensive litigation. The businesses that fare best are usually the ones that say little publicly while acting decisively behind the scenes. When […]
Author: Sean M. Pena
Utility-Scale Battery Storage Projects: A Legal Roadmap for Developers, Property Owners and Other Stakeholders
Utility-scale battery energy storage systems (BESS) are becoming an increasingly important component of the electric grid throughout New Jersey, New York, and Pennsylvania. As renewable generation expands, electricity demand increases and grid operators seek greater flexibility, battery storage can help balance supply and demand while providing additional capacity and reliability. For developers, battery storage presents […]
Author: Nicholas Wall
Navigating Disputes: Hire a Partnership Dispute Lawyer
A falling out between partners can be disastrous for any business. In many cases, the partnership will not survive. If you are in an unworkable situation with your partners, it may be time to consult a partnership dispute lawyer experienced in handling partnership breakups and dissolutions before the situation deteriorates any further. It is easy […]
Author: Jay McDaniel
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Author: John D. Giampolo
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Author: Wendy Rubinstein Quiroga
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.