IFPTE Endorses Sen. Whitehouse's CEO Act, Legislation to Penalize Corporations with Excessive CEO Pay

Since 1978, corporate CEO compensation at 350 of the largest U.S. firms has increased by 1209% while typical non-supervisory worker compensation has increased by 15.3%. This dramatic increase in CEO pay drives economic inequality and concentrates extreme wealth and influence in the hands of a few at the expense of workers, public trust, and shared economic prosperity. Additionally, these steep increases in CEO pay are not a reflection of productivity.

In a legislative proposal to realign incentives so that companies curb excess CEO pay, Senator Sheldon Whitehouse (D-CT) and Congresswoman Alexandria Ocasio-Cortez (D-NY) have introduced the CEO Act. This legislation would apply an excise tax on companies with over $100 million in gross receipts and $10 million in payroll, which have at least a 50:1 CEO-to-median-worker pay disparity.

As quoted in Sen. Whitehouse’s press statement, IFPTE President Matthew Biggs said, “CEO compensation has increased dramatically over the last couple of decades, all while compensation for workers has stagnated and inequality has increased. We applaud Sen. Whitehouse for introducing the CEO Act, which will realign incentives by applying an excise tax when the CEO pay to median worker pay exceeds a 50-to-1 ratio.”

Read Sen. Whitehouse’s press release and information about the CEO Act here.