State targets firms with highly paid executives

SACRAMENTO — California is considering raising taxes on some of the country’s largest companies, but the size of the tax increase would depend on how much its highest-paid executive makes compared to its employees.

The bigger the gap, the bigger the tax increase.

The bill by Democratic state Sen. Nancy Skinner passed out of its first committee hearing on Wednesday, keeping it alive a head of a Jan. 31 deadline to pass the Senate.

The proposal would only apply to companies that post at least $10 million of taxable income from business conducted in California. That would apply to about 2,000 companies nationwide, including the Walt Disney Co., headquartered in Burbank.

Heiress Abigail Disney, granddaughter of Roy Disney — the brother of Walt Disney and one of the company’s co-founders — supports the bill. She has no formal role at the company, but she has been advocating for higher wages for the company’s workers.

“At the happiest place on Earth, they are paid so poorly that they rely on food banks, sleep in cars or live so close to the bone that even a small problem could send them into a death spiral,” Disney told state lawmakers on Wednesday.

Walt Disney Co. CEO Bob Iger received more than $65 million in 2018, according to media reports, a higher-than-usual figure because of a onetime stock award connected to the company’s acquisition of 21st Century Fox. That salary was more than 1,400 times the median pay of a Disney employee, according to a study from Equilar.

In 2018, shareholders voted to reject Iger’s pay package in a non-binding vote. Last year, the company responded by cutting $13.5 million of Iger’s future potential earnings.