San Francisco’s Overpaid CEO Tax Fails to Pass

But critics said it threatened to drive away big companies, whose tax revenue is critical to the city’s economic recovery in the wake of the coronavirus pandemic. It had 53.6% of voters saying “no” as of the latest vote count on Monday afternoon.

Proposition C was created to defeat the Overpaid CEO Act by offering an alternative, and failed after receiving 65.9% “no” votes. Rather than increasing taxes on large corporations, Proposition C would have decreased taxes on small to mid-sized businesses by raising the threshold for a tax exemption from businesses with $5 million in gross receipts to $7.5 million.

This proposal would have also increased the scheduled Top Executive Pay Tax rate for the year 2027, but frozen any increase in the following years.

Supporters of Proposition C, which included the Bay Area Council, GrowSF and the city’s Chamber of Commerce, said their measure would ease tax burdens on smaller businesses. They also pointed out that Proposition D would undo portions of Proposition M, which voters passed in November 2024. That measure lowered some taxes on large businesses after the pandemic, when several left San Francisco, to encourage more big corporations to stay in place or come to the city.

The initial returns marked a victory for Mayor Daniel Lurie, who came out against both measures, saying they were designed to confuse voters.

“Voters recognize that our recovery depends on creating opportunity through jobs, thriving small businesses and attracting investment — not making it harder for employers to grow here. Everyone must pay their fair share, and we can uphold our values and invest in our future without standing in the way of opportunity,” Lurie said in a statement on Monday. “That’s the approach reflected in the budget I recently proposed: protecting healthcare, food assistance and other critical services while continuing to invest in housing, childcare and economic recovery. We can protect critical services and create opportunity at the same time. A stronger economy is what makes both possible.”

In other races, San Franciscans overwhelmingly backed Proposition A, which would issue a $535 million bond to upgrade earthquake safety and emergency response facilities across the city.

Proposition B, which would change term limits in San Francisco so that no one may serve more than two four-year terms on the Board of Supervisors or as mayor, passed with about 53% of voters in support.

Current law limits individuals to two consecutive terms, allowing them to run again after leaving office for four years.

Those supporting the measure said it would make elections more competitive, incentivize new ideas and promote different leaders from the community by requiring elected officials to step aside after eight years in office. The measure had widespread support on the current Board of Supervisors, with endorsements from Supervisors Bilal Mahmood, Alan Wong, Matt Dorsey, Jackie Fielder and Myrna Melgar.

But critics of the idea stressed that experience matters, especially when it comes to government and politics. They also said elections already offer the opportunity for new candidates to run and voters have the power to reject an incumbent.

Opponents included current Supervisors Rafael Mandelman and Chyanne Chen, as well as former San Francisco Mayor Willie Brown and former Gov. Jerry Brown.

The issue of whether elected officials should face term limits has percolated in Democratic circles since the death of Sen. Dianne Feinstein. An effort to explore term limits failed to make its way through the California Democratic Party earlier this year.