Requires a separate shareholder vote to approve such compensation plan.
Requires proxy solicitation material concerning an acquisition, merger, consolidation, or proposed sale or other disposition of substantially all the assets of an issuer to disclose any agreements or understandings with any of its principal executive officers regarding any compensation (whether present, deferred, or contingent) based on or otherwise relating to the acquisition, merger, consolidation, sale, or other disposition (golden parachute compensation).
Requires mandatory electronic filings to appear in a clear, simple, and readily accessible format.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4291 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 4291
To amend the Securities Exchange Act of 1934 to require additional
disclosure to shareholders of executive compensation.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 10, 2005
Mr. Frank of Massachusetts (for himself, Mr. George Miller of
California, Mr. Obey, Mr. Rangel, Mr. Sabo, and Ms. Velazquez)
introduced the following bill; which was referred to the Committee on
Financial Services
_______________________________________________________________________
A BILL
To amend the Securities Exchange Act of 1934 to require additional
disclosure to shareholders of executive compensation.
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 ``Protection Against Executive
Compensation Abuse Act''.
SEC. 2. ADDITIONAL EXECUTIVE COMPENSATION DISCLOSURES.
(a) Amendment.--Section 16 of the Securities Exchange Act of 1934
(15 U.S.C. 78n) is amended by adding at the end the following new
subsection:
``(i) Additional Executive Compensation Disclosures.--
``(1) Compensation plan.--
``(A) Annual statements and proxy materials.--Each
issuer required to file an annual report under section
13(a) shall include in such annual report, and in any
proxy solicitation materials accompanying a proxy
solicitation on behalf of the management of the issuer
in connection with an annual or other meeting of the
holders of the securities of the issuer, a
comprehensive statement of such issuer's compensation
plan for the principal executive officers of the
issuer. Such compensation plan shall include--
``(i) any type of compensation (whether
present, deferred, or contingent) paid or to be
paid to such principal executive officers,
including--
``(I) an estimate of the present
value of any accrued pension of such
officers;
``(II) the estimated market value
of any other benefits received by such
officers; and
``(III) any agreements or
understandings concerning any type of
compensation;
``(ii) the short- and long-term performance
measures that the issuer uses for determining
the compensation of such principal executive
officers and whether such measures were met by
such officers during the preceding year; and
``(iii) the policy of the issuer adopted
pursuant to the rules promulgated under
paragraph (3).
``(B) Shareholder approval.--The proxy solicitation
materials containing the statement required by
subparagraph (A) shall require a separate shareholder
vote to approve such compensation plan.
``(2) Shareholder approval of golden parachute
compensation.--In any proxy solicitation material that concerns
an acquisition, merger, consolidation, or proposed sale or
other disposition of substantially all the assets of an
issuer--
``(A) the person making such solicitation shall
disclose in the proxy solicitation material, in a clear
and simple form in accordance with regulations of the
Commission, any agreements or understandings that such
person has with any principal executive officers of
such issuer (or of the acquiring issuer, if such issuer
is not the acquiring issuer) concerning any type of
compensation (whether present, deferred, or contingent)
that are based on or otherwise relate to the
acquisition, merger, consolidation, sale, or other
disposition; and
``(B) such proxy solicitation material shall
require a separate shareholder vote to approve such
agreements or understandings.
``(3) Return of certain compensation.--The Commission shall
prescribe rules requiring each issuer to adopt a policy
requiring the reimbursement by any principle executive officer
to the issuer of any compensation received by such officer that
is--
``(A) not provided for in the compensation plan
required by paragraph (1);
``(B) based on performance by the officer that does
not meet the job performance measures identified in
such statement;
``(C) incentive compensation or bonuses received by
such officer within 18 months before any negative
material restatement by the issuer; or
``(D) related to fraud or misrepresentation on the
part of such officer.
``(4) Principal executive officer.--For purposes of this
subsection, the term `principal executive officer' means--
``(A) all individuals serving as the chief
executive officer of an issuer, or acting in a similar
capacity, during the most recent fiscal year,
regardless of compensation level; and
``(B) for an issuer with total assets of--
``(i) more than $250,000,000 but less than
$500,000,000, the 2 most highly compensated
executive officers, other than an individual
identified under subparagraph (A), that were
serving as executive officers of an issuer at
the end of the most recent fiscal year; or
``(ii) more than $500,000,000, the 4 most
highly compensated executive officers, other
than an individual identified under
subparagraph (A), that were serving as
executive officers of an issuer at the end of
the most recent fiscal year.''.
(b) Deadline for Rulemaking.--Not later than 1 year after the date
of the enactment of this Act, the Securities and Exchange Commission
shall issue any final rules and regulations required by the amendments
made by subsection (a).
SEC. 3. CLEAR AND SIMPLE INTERNET DISCLOSURE.
Section 16(a)(4) of the Securities Exchange Act of 1934 (15 U.S.C.
78p(a)(4)) is amended--
(1) in subparagraph (B), by inserting ``, in a clear,
simple, and readily accessible format,'' after ``each such
statement''; and
(2) in subparagraph (C), by inserting ``, in a clear,
simple, and readily accessible format,'' after ``that
statement''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
Referred to the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.
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