Published
December 15, 2025
On December 6, 2025, the Service Employees International Union (SEIU) and other unions launched a campaign to promote the so-called “Overpaid CEO Act” on the San Francisco ballot for next year’s June primary. The Act would create a new surtax on businesses where top executives earn more than 100 times the median worker’s pay. It is targeted at large companies that employ more than 1,000 employees and more than $1 billion in revenue. Unions estimate it would generate some $200 million a year for San Francisco’s general fund.
CEO’s and other business leaders certainly make tempting boogeymen. But a look beyond the feel good sense of making a run at an executive reveals that the SEIU’s campaign could cause real harm to the city and its workers.
First, a number of businesses have already left the San Francisco area, taking jobs with them. In part this is because of higher costs since the city is one of the most expensive markets nationwide. A new surtax could increase the exodus.
Second, a single good year for a company, which likely would increase the value of executives’ stock options and performance bonuses, could trigger the tax. This would create volatility and discourages companies from granting performance-based incentives that drive economic growth.
Third, the surtax could actually depress entry level hiring, since it is based on wage ratios. Employers may be reluctant to bring in new employees whose presence could trigger increased taxes. When Portland, Oregon, implemented a similar CEO pay-ratio tax in 2017, Oregon Business and Industry noted that “Oregon has become a very difficult place to operate a business. That difficulty often translates into higher costs, which means higher prices for consumers, less investment in workers, or both.”
Finally, San Francisco competes globally for tech, finance, and biotech investment. Punishing companies for hiring talented executives who command high salaries sends a message that the city is hostile to businesses and business formation.
While the SEIU’s ballot initiative has a certain populist appeal, if passed it is likely to have negative repercussions on jobs and workers. It seems that once again, the SEIU is putting politics over prosperity.
About the author
Michael Billet
Michael Billet, director of policy research for Employment Policy at the U.S. Chamber of Commerce, keeps members and internal Chamber policy staff abreast of pending labor, immigration, and health care legislation, as well as federal regulatory and subregulatory activities. He is also responsible for planning the Chamber’s annual workplace and community wellness forum.
