Curtailing Executive Overcompensation (CEO) Act

The Curtailing Executive Overcompensation (CEO) Act imposes a new excise tax on large companies where the highest-paid CEO earns significantly more than the median worker. This tax applies to employers with over $100 million in annual revenue and over $10 million in wages, charging a fee equal to the lesser of 1% of the pay gap or 1% of the company's gross receipts. The law defines the pay gap as the difference between the CEO's average compensation and 50 times the median wage of all employees earning at least $5,000, with thresholds adjusted for inflation after 2027. Companies found to be manipulating their workforce to avoid the tax could face joint liability, and the IRS will issue regulations to prevent such avoidance.