[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1664 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 1664

    To amend the executive compensation provisions of the Emergency 
    Economic Stabilization Act of 2008 to prohibit unreasonable and 
   excessive compensation and compensation not based on performance 
                               standards.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 23, 2009

Mr. Grayson (for himself, Mr. Himes, Ms. Lee of California, Mr. Welch, 
 Mr. Ellison, Mr. Ortiz, Mr. Perriello, Ms. Jackson-Lee of Texas, and 
  Mr. Connolly of Virginia) introduced the following bill; which was 
            referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
    To amend the executive compensation provisions of the Emergency 
    Economic Stabilization Act of 2008 to prohibit unreasonable and 
   excessive compensation and compensation not based on performance 
                               standards.

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

SECTION 1. PROHIBITION ON EXECUTIVE COMPENSATION NOT BASED ON 
              PERFORMANCE STANDARDS.

    (a) Prohibition on Executive Compensation Not Based on Performance 
Standards.--Section 111 of the Emergency Economic Stabilization Act of 
2008 (12 U.S.C. 5221) is amended by redesignating subsections (e) 
through (h) as subsections (f) through (g), and inserting after 
subsection (d) the following:
    ``(e) Prohibition on Executive Compensation Not Based on 
Performance Standards.--
            ``(1) Prohibition.--No financial institution that has 
        received or receives a capital investment under this title, or 
        with respect to the Federal National Mortgage Association, the 
        Federal Home Loan Montage Corporation, or a Federal home loan 
        bank, under the amendments made by section 1117 of the Housing 
        and Economic Recovery Act of 2008, may, while that capital 
        investment remains outstanding, make a compensation payment to 
        any executive or employee under any pre-existing compensation 
        arrangement, or enter into a new compensation payment 
        arrangement, if such compensation payment or compensation 
        payment arrangement--
                    ``(A) provides for compensation that is 
                unreasonable or excessive, as defined in standards 
                established by the Secretary in accordance with 
                paragraph (2); or
                    ``(B) includes any bonus, retention payment, or 
                other supplemental payment that is not directly based 
                on performance-based measures set forth in standards 
                established by the Secretary in accordance with 
                paragraph (2).
            ``(2) Standards.--Not later than 30 days after the date of 
        enactment of this subsection, the Secretary shall establish the 
        following:
                    ``(A) Unreasonable and excessive compensation 
                standards.--Standards that define `unreasonable or 
                excessive' for purposes of subparagraph (1)(A).
                    ``(B) Performance-based standards.--Standards for 
                performance-based measures that a financial institution 
                must apply when determining whether it may provide a 
                bonus or retention payment under paragraph (1)(B). Such 
                performance measures shall include--
                            ``(i) the stability of the financial 
                        institution and its ability to repay or begin 
                        repaying the United States for any capital 
                        investment received under this title;
                            ``(ii) the performance of the individual 
                        executive or employee to whom the payment 
                        relates;
                            ``(iii) adherence by executives and 
                        employees to appropriate risk management 
                        requirements; and
                            ``(iv) other standards which provide 
                        greater accountability to shareholders and 
                        taxpayers.''.
    (b) Revision to Rule of Construction.--Section 111(b)(3)(D)(iii) of 
the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 
5221(b)(3)(D)(iii)) is amended by inserting before the period the 
following: ``, except that no entity subject to subsection (e) may pay 
a bonus to any of its employees or executives, without regard to when 
the arrangement to pay such a bonus was entered into.''.
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