Well technically running separate businesses for each salary tier would still get around it. The CEO's pay would be the combination of all of the individual CEO salaries that they would be doing.
Also cleaning and administration services wouldn't be contractors, but services bought from another company. So that wouldn't count either.
Point of interest: sometimes technical people forget that the law doesn't work the way that computers do.
If you close all reasonable loopholes and make your intent clear when you write the law, a judge (at least here in the US, I know the UK has a slightly different system) is not going to say "Oh, that's undefined behavior, you get a free pass."
He or she is going to say "That's undefined behavior, but you're trying to circumvent what was clearly the intent of the law. Bring yourself into compliance or face further penalties."
Well I don't actually consider the options I've presented to be that far fetched.
For all the places that I've worked, the cleaners have always been part of another company, one that was contracted to provide cleaning services. There's also firms and contractors that provide bookkeeping services for small businesses. I'm sure a lot of other administrative tasks could be outsourced as well.
Having these services provided by other companies would raise the minimum salary in a company quite a lot.
The other thing companies do is set up plenty of shell/thin corporations around the world, assign the IP rights to those in minimal tax countries, and then charge massive internal fees so that all the rest of the organisation barely makes a profit. This sort of thing seems to be the same level of loop-hole as setting up multiple companies so that the CxO's can get paid more.
Of course that's forgetting that most of the CxO pay is actually in stock and options, and not so much is in cash, so I don't know how much a law capping CEO pay would do. Some notable CEO's have actually taken just $1 of actual cash for payment (because legally they have to be paid something to receive company perks).
>The other thing companies do is set up plenty of shell/thin corporations around the world, assign the IP rights to those in minimal tax countries, and then charge massive internal fees so that all the rest of the organisation barely makes a profit. This sort of thing seems to be the same level of loop-hole as setting up multiple companies so that the CxO's can get paid more.
All it takes to end this practice is for the tax authorities to take a dim view of it.
Starbucks and Google were both caught by this and although they didn't pay a fine as large as they should have done, with a nod and a wink, they did end up paying more.
The economic system is nowhere near as immutable to change as certain people would like you to believe.
The swift reaction by BlackRock to the government simply making noises in particular was noteworthy:
That's easy to apply to a common-sense law like "Don't cut other people's limbs off without their permission".
It's not so easy to apply to a law written in terms of concepts like "two employees of the same company", because "company" is itself something that only exists as a legal construct and "employee" already has a specific legal meaning that's significantly different from its common-sense one.
True, but prosecution at the levels we're talking about is as much a political exercise as a legal one.
Wikipedia's background is weak, but Northern Securities Co. v. United States in 1903 [1], one of the first major anti-trust prosecutions, was equally novel by the fact that the US government was choosing to prosecute it at all.
The Sherman Anti-Trust Act (1890) had been on the books for better than a decade. Under a unified government, applicability is rarely as much of a question as enforcement.
My friend and I started a habit of prefacing humorously pedantic rebuttals with "Well, actually...", but also calling each other on it when we did so involuntarily.
It's surprising how often we had cause to (although maybe we're both borderline).
Also cleaning and administration services wouldn't be contractors, but services bought from another company. So that wouldn't count either.