San Francisco Voters Reject Overpaid CEO Act Tax Measure

San Francisco voters rejected the Overpaid CEO Act on June 9, 2026, according to Bloomberg. The union-backed measure would have increased taxes on large corporations doing business in the city if their CEO’s compensation exceeded 100 times the salary of the median employee.

The measure targeted large businesses operating within San Francisco city limits. It sought to implement a tax penalty based on the pay gap between top executives and the general workforce.

Labor unions provided the primary backing for the ballot initiative. The proposal failed to secure enough votes to become law.

How did the Overpaid CEO Act calculate taxes?

The act used a pay-ratio threshold to determine tax liability. According to Bloomberg, the tax would have applied to any large business where the CEO earned 100x more than the median employee.

A median employee represents the midpoint of a company’s pay scale, where half of the employees earn more and half earn less. If a CEO’s total compensation package surpassed 100 times that midpoint figure, the company would have faced higher tax obligations to the city.

What data would have triggered the tax?

The proposal relied on pay-ratio data that many large corporations already track. Since 2018, the U.S. Securities and Exchange Commission has required public companies to disclose the ratio of the CEO’s annual total compensation to the median annual total compensation of all other employees.

This federal reporting requirement provided a standardized framework for calculating the ratios that the Overpaid CEO Act intended to tax. By using these existing figures, the city would have been able to identify which corporations met the 100x threshold without requiring new, separate accounting audits from the businesses.

What happens next for San Francisco businesses?

Large corporations doing business in San Francisco will not face the tax increases proposed by the measure. The rejection of the act maintains the current tax structure for companies regardless of the compensation gap between executives and staff.

The vote concludes this specific attempt by union groups to link corporate tax rates to internal pay equity in the city.