Congressman Mark DeSaulnier (CA-10) introduced the CEO Accountability and Responsibility Act (H.R. 5019), a bill that would limit corporate greed, invest in working Americans, and reduce income inequality.

This bill increases the corporate income tax rate for publicly traded corporations that pay their chief executive officers or highest paid employees more than 100 times the median compensation of all their U.S. employees or that increase the number of contracted or foreign employees.

The bill also requires an executive agency, in the evaluation of bids or proposals for federal contracts, to give preference to a bidder that has a compensation ratio of highly paid to all employees of less than 50 to 1 in the previous calendar year.

According to bill sponsors, while in the 1970s, the average CEO earned roughly 20 to 30 times the compensation of a typical worker, that disparity has exploded with estimates placing the ratio at over 300:1 for top S&P 500 companies. The CEO Accountability and Responsibility Act would increase corporate taxes on companies that have extreme disparities between CEO and worker pay. It would also offer preferential treatment in federal contracts to companies with pay ratios below 50:1. With the passage of Dodd-Frank, we now have data on the pay ratios for publicly traded companies. The CEOs of Starbucks and Abercrombie & Fitch make over 6,000 times what the company’s median worker makes. If the CEO Accountability and Responsibility Act were to become law, these companies would be forced to pay millions in additional taxes. 

In Favor

“As working Americans struggle with higher costs of living and diminished power in the workplace, ultrawealthy CEOs and large corporations are profiting hand over fist at their employees’ expense and rewarding themselves with exorbitant salaries and bonuses,” said Congressman DeSaulnier. “While Republicans bend over backwards to help their CEO friends get richer and support tariffs that make everything more expensive, I’m countering their misguided efforts to put the power back where it really belongs—with workers—to put an end to excessive corporate greed that is eroding the middle class and threatening our democracy.”

Opponents argue that, although aiming to curb inequities in executive compensation, the CEO Accountability and Responsibility Act risks undermining essential governance flexibility. By imposing heavier taxes on publicly traded firms with pay ratios above 100:1—and offering federal contract preference only to those maintaining ratios below 50:1—it could inadvertently penalize companies striving to attract high-caliber leadership whose compensation is performance-linked through equity and long-term incentives.

This approach may also duplicate existing transparency efforts, such as the pay-ratio disclosure mandated under Dodd-Frank without delivering meaningful benefits to workers, while adding bureaucratic burden to public companies. Moreover, capping executive pay relative to median worker compensation may reduce competitiveness; highly capable executives might simply relocate to less-regulated or private firms, eroding the talent pool and harming business performance.

Should Congress pass H.R.5019, the CEO Accountability and Responsibility Act?