Bill
SD 385
Overview: Bill Number: SD 385, Title: An Act relative to excessive executive compensation, Status: House concurred, Introduced: February 27, 2025, Classification: proposed billPurp
Overview: Bill Number: SD 385, Title: An Act relative to excessive executive compensation, Status: House concurred, Introduced: February 27, 2025, Classification: proposed bill
Purpose and Intent: The primary goal of this bill is to address the issue of excessive executive compensation, particularly in publicly traded companies, by imposing new restrictions and disclosure requirements. The legislation is motivated by concerns over growing income inequality and the disproportionate allocation of corporate resources to top-level executives.
Key Provisions:
- Caps the maximum ratio of CEO compensation to the median employee salary at 50:1
- Requires public companies to disclose the pay ratio between the CEO and the median employee
- Imposes a surtax on public companies that exceed the 50:1 pay ratio
- Prohibits the use of certain executive compensation practices, such as golden parachutes and excessive severance packages
Affected Parties and Impacts:
- Public companies and their shareholders would be subject to the new compensation restrictions and disclosure requirements
- CEOs and other top executives at affected companies would see their potential compensation limited
- Employees at these companies may benefit from a more equitable distribution of corporate resources
Procedural and Timeline Considerations:
The bill has passed the state Senate and is currently under consideration in the House. If approved, the legislation would take effect 6 months after enactment, providing time for companies to adjust their compensation practices.
Compiled from official sources — confirm details with the bill’s official record.
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