SECTION 1. Chapter 63, section 81 of the The General Laws as appearing in the 2018 Official Edition, is hereby amended by adding the following new section:

SECTION 82

EXECUTIVE COMPENSATION TAX.

Section 1.

As used in this section, terms shall have the following meanings:

(a)

(1) “Compensation,” in the case of employees of the taxpayer other than the chief executive officer, chief operating officer, or the highest paid employee, means wages as defined in section 1 of chapter 63 of the General Laws.

(2) “Compensation,” in the case of the chief executive officer, chief operating officer, or the highest paid employee of the taxpayer, means total compensation as reported in the Summary Compensation Table reported to the United States Securities and Exchange Commission pursuant to Item 402 of Regulation S-K of the Securities and Exchange Commission.

(b) “Compensation ratio” for a taxable year means a ratio where the numerator is the amount equal to the greater of the compensation of the chief executive officer, chief operating officer, or the highest paid employee of the taxpayer averaged over the three calendar years preceding the beginning of the taxable year and the denominator is the amount equal to the median compensation of all employees employed by the taxpayer, including all contracted employees under contract with the taxpayer, in the United States for the calendar year preceding the beginning of the taxable year.

Section 2.

Every corporation with a net income of $10,000,000 or more doing business in the commonwealth and not expressly exempted from taxation shall annually pay to the commonwealth a tax according to or measured by net income, to be computed at the applicable tax rate upon the basis of the net income for that taxable year, as determined as follows, but in no case shall the tax rate be less than the minimum tax specified in section two of chapter 63 of the General Laws.

The applicable tax rate shall be determined as follows:

(a) If the compensation ratio is over zero but not over 50, the applicable tax rate is the base corporate tax rate plus an additional 0%;

(b) If the compensation ratio is over 50 but not over 100, the applicable tax rate is the base corporate tax rate plus an additional 1%;

(c) If the compensation ratio is over 100 but not over 200, the applicable tax rate is the base corporate tax rate plus an additional 2%;

(d) If the compensation ratio is over 200 but not over 300, the applicable tax rate is the base corporate tax rate plus an additional 4%;

(e) If the compensation ratio is over 300 but not over 400, the applicable tax rate is the base corporate tax rate plus an additional 6%;

(f) If the compensation ratio is over 400 but not over 500, the applicable tax rate is the base corporate tax rate plus an additional 8%;

(g) If the compensation ratio is over 500, the applicable tax rate is the base corporate tax rate plus an additional 10%.

Section 3.

If the total number of full-time employees, determined on an annual full-time equivalent basis, employed by the taxpayer in the United States for a taxable year is reduced by more than 10 per cent, as compared to the total number of full-time employees, determined on an annual full-time equivalent basis, employed by the taxpayer in the United States for the preceding taxable year and the total number of contracted employees or foreign full-time employees, determined on an annual full-time equivalent basis, of the taxpayer for that taxable year has increased as compared with the total number of contracted employees or foreign full-time employees, determined on an annual full-time equivalent basis, of the taxpayer for the preceding taxable year, then the applicable tax rate determined under Section 2 shall be increased by 50 percent. For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees, contracted employees, and foreign full-time employees for the immediately preceding prior taxable year shall be zero.

Section 4.

This act shall take effect for the tax year beginning on January 1, 2022.