The surtax is scheduled to begin in 2017, after the Securities and Exchange Commission begins requiring public companies to calculate and disclose their CEO versus median employee compensation per Dodd-Frank. Portland will use this data to calculate the surtax owed.
This CEO-compensation surtax is the first of its kind to be adopted in the United States. As public companies disclose their data around salary ranges, this will be an issue that receives public attention with earnings releases. With differing viewpoints about government interference in the compensation structure of companies, it remains to be seen whether this is a one-time news event or portends other jurisdictions attempting to emulate the Portland surtax. As that is considered, debate will also occur as to the determination as to what is perceived as a gap differential requiring a surtax.
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