- Since "high CEO pay" is defined as 100x multiple of average pay, the first unintended incentive is for companies to cut back on hiring low-end labor, or 1099/outsource so that they do not drag down the average pay. This directly harms the employment prospects of people at the bottom.
- If it succeeds in reducing CEO pay, it's not clear that the money is redistributed to other employees, as opposed retained to by the company as capital, or returned to shareholders. And not that this matters much. Even if you were to redistribute, say Bobby Kottick's $30M compensation, it would result in a net-gain of ~$270 per month per employee at Activision. That is assuming the CEO's pay goes to ZERO. If this tax only results in a net -10% change in CEO pay, it's actual economic benefit to other workers is a rounding error.
- This arbitrarily favors companies of certain structure vs others. For example, a VC firm or Law firm has an extremely high average pay, while any operation that likely involves "real economy" employs a legion of low-pay workers. The CEO of a large, meat-and-potatoes kind of operation is far more likely to be dinged by the 100x rule than the head of a high end professional partnership. Why are VC firms special in the eyes of this law?