Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Executive Compensation topic
No spam. Unsubscribe anytime.
Lewis files bill to tax firms with executive-to-median pay ratio above 100
Summary
State Sen. Jason M. Lewis filed a bill Jan. 13 that would add a 2-percentage-point corporate excise on financial institutions and publicly held corporations whose chief executive pay exceeds 100 times the median U.S. worker pay, effective for taxable years beginning Jan. 1, 2027.
State Sen. Jason M. Lewis filed legislation on Jan. 13 that would impose an additional 2 percentage-point corporate excise on certain Massachusetts corporations whose chief executive or highest-paid employee earns more than 100 times the firm’s U.S. median employee compensation. The bill is titled "An Act relative to excessive executive compensation."
The bill would amend chapter 63 of the Massachusetts General Laws to insert a statutory definition of “compensation ratio” and to add two new provisions imposing the extra tax for taxable years beginning on or after Jan. 1, 2027. The text defines “compensation ratio” as the greater of the chief executive’s compensation or the highest-paid employee’s compensation, divided by the median compensation of all employees employed by the business in the United States for the prior calendar year, including contracted employees.
Under the proposed language, Section 2 of chapter 63 would be amended so that, for taxable years beginning on or after Jan. 1, 2027, the tax imposed on financial institutions whose compensation ratio exceeds 100 would be the existing excise specified in subsection (a) plus an additional 2 percent of the corporation’s net income determined to be taxable under the chapter. Section 39 would be amended to apply the same additional 2 percent excise to publicly held corporations, as defined in Section 162(m)(2) of the Internal Revenue Code, whose compensation ratio exceeds 100.
The filing notes a related matter from the prior legislative session: Senate No. 1858 of 2023-2024. The bill text included in the filing does not specify estimated fiscal impacts, administrative implementation details, or whether exceptions beyond those referenced in the bill (subsections (b) and (d) as cited in the text) would apply to particular firms.
The effective date specified in the bill is for taxable years beginning on or after Jan. 1, 2027; the document does not record committee referrals, hearings, votes, or further legislative action in the filing itself.
