US tech companies such as Uber are to pilot a scheme to offer to pay some of their gig workers part of their wages in equity, rather than cash, in a move which the Securities and Exchange Commission (SEC) said mirrored changes in the modern workplace
The US regulator is proposing rules on a temporary basis which would permit companies to provide equity compensation to certain ‘platform workers’ who provide services available through their issuer's technology-based platform or system.
This would be restricted to limits of no more than 15% of annual compensation, and no more than $75,000 in three years, plus other conditions.
The work could involve the individual providing services to end users, such as ride-sharing, food delivery, household repairs, dog-sitting, or tech support, or using the platform to sell goods or lease property to third parties.
Jay Clayton, SEC chairman, said: ‘Work relationships have evolved along with technology, and workers who participate in the gig economy have become increasingly important to the continued growth of the broader U.S. economy.
‘The rules we are proposing today are intended to allow platform workers to participate at a measured level — up to 15% of their compensation — in the growth of the companies that their efforts support.’
The move requires amendments to the SEC’s Rule 701 and Form S-8 , which are also being updated to modernise the framework for compensatory securities offerings more generally to allow employees and other workers to receive equity compensation from their company while maintaining investor protections.
‘Overpaid executive tax’
Separately, San Francisco citizens have voted overwhelmingly to introduce what is believed to be the first US tax aimed at combatting pay inequalities.
The so-called ‘overpaid executive tax’, or Proposition L, applies to any company based in the city whose top executive earns 100 times more than their average worker, and is a response to the growing divide between highly paid Silicon Valley chiefs and the local population.
These companies must pay an extra 0.1% surcharge on their annual business tax payment, increasing by 0.1% per factor of 100, up to 0.6%.
The CEO tax is expected to generate between $60m and $140m per year, which its sponsors say should be directed towards health services.
However, opponents of the new tax point say it is inappropriate to implement such a charge currently, pointing out that San Francisco has seen an exodus of tech workers who have chosen to work from home elsewhere during the pandemic, and warning their employers may also choose to leave.
Proposition L tax details are here: https://beta.documentcloud.org/documents/20402263-200629_executivepay_lt