Executive Compensation and Corporate Governance Act of 2009 - Amends the Emergency Economic Stabilization Act of 2008 (EESA) to direct the Secretary of the Treasury to require any institution assisted under the Troubled Asset Relief Program (TARP) to meet specified standards for executive compensation and corporate governance while any assistance under TARP is outstanding.
Subjects all auction purchases of troubled assets to the prohibition against senior executive employment contract provision of golden parachutes.
[Congressional Bills 111th Congress]
[From the U.S. Government Printing Office]
[H.R. 851 Introduced in House (IH)]
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),''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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