PORTLAND, Ore. (AP) – The Portland City Council has approved a first-of-its-kind tax on public companies that pay their chief executives vastly more than they pay an average worker.
The Oregonian/OregonLive reports that on Wednesday the council approved the plan, which targets publicly traded companies whose chief executives report salaries at least 100 times higher than the salary of a median worker.
Under the ordinance, a company with a CEO-to-worker ratio of at least 100-to-1 will pay a surcharge equal to 10 percent of the amount it pays for Portland’s business tax.
Officials expect the tax to raise $2.5 million year once it starts in January 2017.
Commissioner Steve Novick says he hopes the tax will discourage companies from paying disproportionate salaries to their CEOs.