1. United States
2. Letter

The rise of extreme CEO-worker pay ratios across corporate America is a troubling issue that demands legislative action. As revealed in the recent analysis by the Institute for Policy Studies, the average CEO-to-worker pay ratio in the S&P 500 stood at a staggering 272-to-1 in 2022. At firms with the lowest median worker wages, the ratio skyrocketed to 603-to-1 on average. These vast pay disparities are exacerbating economic inequality, perpetuating racial and gender gaps, incentivizing corporate recklessness, and even undermining business productivity and profitability. We urge you to support legislative measures that rein in this unchecked excess and realign corporate priorities. A sensible approach would be to impose an escalating excise tax on companies with CEO-worker pay ratios exceeding a reasonable threshold, such as the 50-to-1 limit proposed in the Curtailing Executive Overcompensation (CEO) Act. This would generate billions in revenue while creating a powerful incentive for corporations to lift up worker wages rather than lavishing outrageous compensation packages on those at the very top. Importantly, any such legislation should account for the prevalence of stock-based pay that companies use to inflate CEO compensation through buybacks and other financial maneuvers. We call on you to support complementary measures like the Reward Work Act to restrict buybacks, the ALIGN Act to prevent executives from cashing out windfalls tied to buybacks, and the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act to close tax loopholes that subsidize excessive pay. Reining in runaway executive compensation is crucial for restoring fairness, strengthening our economy, and upholding democratic principles.