Labor & Employment Law Daily Wrap Up, SENATE NEWS—Sanders, Tlaib introduce bill regarding CEO pay and corporate taxes, (Sep 16, 2025)
Organizations Mentioned:Tesla
By Brandi O. Brown, J.D.
The Tax Excessive CEO Pay Act would raise taxes on corporations that pay their executives more than 50 times the wages of their workers.
Yesterday, Senators Bernie Sanders (I-VT) and Rashida Tlaib (D-MI) introduced the Tax Excessive CEO Pay Act, legislation that would raise taxes on corporations that pay their executives more than 50 times the wages of the corporation’s workers. Other cosponsors include Senators Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), Peter Welch (D-VT), Ed Markey (D-MA), and 22 members of the House of Representatives.
The Act would apply a higher corporate tax rate on companies that pay their CEO or other highest-paid executive a disproportionate amount of compensation compared to their workers. The higher corporate tax rate will be based on SEC-reported public data. The tax rate would increase by 0.5 percent for those companies reporting a ratio between the compensation of the highest-paid executive and median worker pay of higher than 50 to 1 on average over five years and grow to a rate of five percent for those companies reporting a ratio of 500 to 1 or higher.
For example, the bill summary explains, if its CEO were to receive the full $975 billion compensation package that Tesla’s board has proposed, Tesla could owe up to $100 billion more in taxes over the next decade under this legislation.
Majority of Americans favor caps. “A recent national survey found that the typical American believes CEOs should make no more than six times what their workers earn,” the press release noted. “About 62% of Americans—including 62% of Republicans and 75% of Democrats—favor capping CEO pay relative to worker pay.” The cosponsors note that if the Act had been in effect in 2024, the difference in what the country’s largest corporations would have paid would have been in the billions of dollars.
The frequently asked questions document addresses anticipated questions, such as one about CEO/founders who take only nominal annual pay because they have “mountains of their company’s stock” and questions about which workers are included in the median calculation and why.
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