Yours is the first comment to use "exploit" on the page (at the moment), and I completely agree. The right that people have in forming a government that oversees business is largely to avoid the exploitation of others. This is why slavery, indentured servitude, human trafficking and such are illegal.
The question I have is, how can you define exploitation? Minimum wage laws have been the stopgap in place for some time, but they seem to have flaws; plenty of people making minimum wage still can't support themselves or their families, while many of these people are working for corporations that make huge profits and pay their upper level management lavishly. It's difficult for me to not call that exploitation.
(Raising the minimum wage is one solution, but it's easy to admit that there are industries where different minimums make sense, particularly in how they're calculated... home health care is a good example of a problem spot -- where 24-hour-a-day live-in care doesn't really translate to 24-hours of work the same way a 9-5 job is an 8-hour salaried work day with benefits and time off, or a 3-hour lunch shift at a fast food hourly job with no benefits is just, well, 3 hours.)
Enforced ratios seem to be a good way of mitigating those problems. Highly paid leaders will still be highly paid, but they will only grow their own compensation by growing the compensation of those whom they manage. A vested interest in the worker-bees wages seems to be a good way to avoid exploitation.
Still, it would have to be a well-written law. How are "wholly owned subsidiaries" considered... if "Fast Food Corporation" franchises its stores as individual "companies", who are the lowest and highest paid individuals in the structure? How is ownership managed (if I'm paid in stock, or if I'm an unsalaried owner taking bonuses from profits, how does it count towards the ratio)? What is the effect on business that rely on offshoring work or sub-contract labor (if I "fire" all my basketweavers and offer them the same low-pay as sub-contractors, am I breaking a rule)? There's a lot to be considered.
Also, the choice of 12x is going to be a huge point of contention. Should it be 10x? 50x?
It's an interesting concept. I don't think it will happen in the US... definitely not soon, but I'd at least strongly consider it if it were up to me.