Portland today became the first city to impose a surcharge on companies that pay their CEOs 100 times what their median employees make.

City council approved the tax by a vote of three to one Wednesday. City Commissioner Steve Novick, who lost reelection in November, proposed the tax back in August when he faced a challenge from the left.

Commissioner Amanda Fritz and Mayor Charlie Hales joined Novick in approving the tax. Commissioner Dan Saltzman voted against it. Commissioner Nick Fish was absent.

Novick didn't speak to the issue on Wednesday, but the introduction to the ordinance describes the concern: "The explosion of chief executive officer pay is a major contributor to growing inequality."

The tax is possible thanks to new Securities and Exchange Commission rules that require companies to disclose the ratio between CEOs' and median workers' pay beginning next year.

The city will impose an extra 25 percent surcharge on companies where CEOs make 250 times the amount paid to the median employee.

"It falls to cities to do creative, progressive policymaking," said Hales before casting his vote in favor.

Saltzman, before voting against the ordinance, said the city should be mindful that it might need to raise revenue in the event of significant shortfalls.

"I don't believe this is the right time and the right place and the right reason," said Saltzman.

The new tax is expected to raise more than $2.5 million annually for the city.