The California Senate on Wednesday could not muster the votes to pass a measure that would have penalized high chief executive salaries with higher corporate taxes.
Sen. Mark DeSaulnier (D-Concord) said his bill would have provided corporations with a financial incentive in the form of sliding, lower tax rates if chief executive pay is kept below 100 times the median pay for their employees. The lawmaker singled out the income of top executives at Walt Disney Co., McDonalds and Oracle as being too high in comparison with the median pay of employees of those corporations.
“Income inequality and poverty in this state and this country is a far greater risk, I believe, than terrorism from other countries,” DeSaulnier told his colleagues.
“Democracy does not thrive in oligarchies,” added Sen. Loni Hancock (D-Berkeley).
The bill failed to get a majority votes after some Democrats, including Sens. Lou Correa of Santa Ana and Jerry Hill of San Mateo, joined Republicans in voting against it. The tally was 19 to 17.
Sen. Jim Nielsen (R-Gerber) said the bill was extreme interference in the marketplace.
“What business has the state of California in setting the salaries of corporate executives,” Nielsen asked his colleagues. Sen. Steve Knight (R-Palmdale) said private executives are accountable to their shareholders who can complain if compensation is too high.
“Let’s not penalize people for being successful,” Knight said about the bill, SB 1372.Copyright © 2015, Los Angeles Times