Unwilling to be outdone by a small credit-card payment processing company to their north, Portland officials are doing something about income inequality—or at least making a show of trying. With the SEC’s ironically expensive, six-years-in-the-making rule requiring public companies to do some long division and publicly disclose how many times more their CEO makes than the average employee coming into effect next year (at least until SEC Chair Debra Wong Yang or Paul Atkins can junk it along with all other financial regulations), Portland has decided to become the first to use it.
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.
While we’re sure none of Portland’s hipster-industrial complex—the donut-burger conglomerates, microbrewery magnates, barter economy bosses, etc.—could possibly be so uncool as to approach the threshold, Portland’s real business community, currently scouting real-estate in Beaverton, Gresham and Vancouver, isn’t so sure about the feel-good measure.
“We see it as an empty gesture,” said Sandra McDonough, the alliance’s president and chief executive, in a telephone interview. “We think they’d be far better off trying to work with business leaders to create more jobs that will lift people up and improve incomes.” Publicly traded companies, she added, are “an easy group to pick on.”