This bill creates a new tax rule that affects mid-sized and larger companies: if a business wants to deduct executive compensation (like salaries and bonuses for top earners) from their taxes, they must also share profits with their regular employees. Specifically, companies have to distribute at least 5% of their annual profits to employees who have worked there for at least a year, and these distributions must be based on the company's actual profits or revenues.

The profit-sharing requirement applies to companies that meet a certain size threshold based on gross receipts. The distributions must follow a written plan and can't be used as an excuse to cut regular employee pay or benefits—companies can't just shift money around to make it look like they're sharing profits while actually paying workers less. There's one exception: if a company can prove to the IRS that making these profit-sharing payments would threaten its survival, they don't have to do it.

Essentially, this bill ties executive tax deductions to employee profit-sharing. If a company wants the tax benefit of deducting what it pays its executives, it has to ensure regular workers also benefit when the company does well. The rule starts applying to tax years after the bill becomes law.