Text: H.R.851 — 111th Congress (2009-2010)All Information (Except Text)

There is one version of the bill.

Text available as:

Shown Here:
Introduced in House (02/04/2009)


111th CONGRESS
1st Session
H. R. 851


To establish executive compensation and corporate governance requirements for institutions receiving assistance under the Troubled Assets Relief Program.


IN THE HOUSE OF REPRESENTATIVES

February 4, 2009

Ms. Giffords introduced the following bill; which was referred to the Committee on Financial Services


A BILL

To establish executive compensation and corporate governance requirements for institutions receiving assistance under the Troubled Assets Relief Program.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

This Act may be cited as the “Executive Compensation and Corporate Governance Act of 2009”.

SEC. 2. Executive compensation and corporate governance.

(a) In general.—Section 111 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5221) is amended by adding at the end the following new subsections:

“(e) Across-the-board executive compensation and corporate governance requirements.—

“(1) STANDARDS REQUIRED.—Effective as of the date of the enactment of the Executive Compensation and Corporate Governance Act of 2009, and notwithstanding any provision of, and in addition to any requirement of subsection (a), (b), or (c) (other than the definitions in subsection (b)(3)), the Secretary shall require any assisted institution to meet standards for executive compensation and corporate governance while any assistance under this title is outstanding.

“(2) SPECIFIC REQUIREMENTS.—The standards established under paragraph (1) shall include—

“(A) limits on compensation that exclude incentives for senior executive officers of an assisted institution which received assistance under this title to take unnecessary and excessive risks that threaten the value of such institution during the period that any assistance under this title is outstanding;

“(B) a provision for the recovery by such institution of any bonus or incentive compensation paid to a senior executive officer based on statements of earnings, gains, or other criteria that are later found to be materially inaccurate;

“(C) a prohibition on such institution making any golden parachute payment to a senior executive officer during the period that the assistance under this title is outstanding;

“(D) a prohibition on such institution paying or accruing any bonus or incentive compensation, during the period that the assistance under this title is outstanding, to the twenty-five most highly-compensated employees; and

“(E) a prohibition on any compensation plan that would encourage manipulation of such institution’s reported earnings to enhance the compensation of any of its employees.

“(3) DIVESTITURE.—During the period in which any assistance under this title to any assisted institution is outstanding, the institution may not own or lease any private passenger aircraft, or have any interest in such aircraft, except that such institution shall not be treated as being in violation of this provision with respect to any aircraft or interest in any aircraft that was owned or held by the institution immediately before receiving such assistance, as long as the recipient demonstrates to the satisfaction of the Secretary that all reasonable steps are being taken to sell or divest such aircraft or interest.

“(4) APPLICABILITY TO PRIOR ASSISTANCE.—Notwithstanding any limitations included in subsection (a), (b), or (c) with regard to applicability, the Secretary may apply the requirements of and the standards established under this subsection to any assisted institution that received any assistance under this title on or after the date of the enactment of the Executive Compensation and Corporate Governance Act of 2009.

“(f) Board observer.—The Secretary may require the attendance of an observer delegated by the Secretary, on behalf of the Secretary, to attend the meetings of the board of directors of any assisted institution that became an assisted institution on or after October 3, 2008, and any committees of such board of directors, while any assistance under this title is outstanding.”.

(b) Repeal of de minimis exception.—Section 111(c) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5221(c)) is amended by striking “and only where such purchases per financial institution in the aggregate exceed $300,000,000 (including direct purchases),”.