[Congressional Record Volume 164, Number 40 (Wednesday, March 7, 2018)]
[Senate]
[Pages S1468-S1469]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 2088. Mrs. GILLIBRAND (for herself and Mr. Durbin) submitted an
amendment intended to be proposed by her to the bill S. 2155, to
promote economic growth, provide tailored regulatory relief, and
enhance consumer protections, and for other purposes; which was ordered
to lie on the table; as follows:
At the appropriate place, insert the following:
SEC. ____. EXCESSIVE EXECUTIVE COMPENSATION.
(a) Denial of Deduction for Payments of Excessive
Compensation.--
(1) In general.--Section 162 of the Internal Revenue Code
of 1986 is amended--
(A) by redesignating subsection (s) as subsection (u); and
(B) by inserting after subsection (r) the following:
``(s) Excessive Compensation.--
``(1) In general.--No deduction shall be allowed under this
chapter for any excessive compensation for any employee of
the taxpayer.
``(2) Excessive compensation.--For purposes of this
subsection, the term `excessive compensation' means, with
respect to any employee, the amount by which the compensation
for services performed by such employee during the taxable
year exceeds the lesser of--
``(A) the median of the compensation paid for services
performed by all employees of the taxpayer during the taxable
year, multiplied by 25, or
``(B) $1,000,000.
``(3) Other definitions and special rules.--For purposes of
this subsection--
``(A) Compensation.--The term `compensation' includes
wages, salary, fees, commissions, fringe benefits, deferred
compensation, retirement contributions, options, bonuses,
[[Page S1469]]
property, and any other form of remuneration that the
Secretary determines is appropriate.
``(B) Employer.--All persons treated as a single employer
under subsection (a) or (b) of section 52 or subsection (m)
or (o) of section 414 shall be treated as a single taxpayer
for purposes of this subsection.
``(C) Employee.--The term `employee' includes full-time,
part-time, and seasonal employees.
``(4) Reporting.--Each employer which provides any
excessive compensation to any employee during a taxable year
shall file a report with the Secretary with respect to such
taxable year including--
``(A) the amount of compensation of the employee of the
taxpayer receiving the lowest amount of compensation during
such taxable year,
``(B) the amount of compensation of the employee of the
taxpayer receiving the highest amount of compensation during
such taxable year,
``(C) the median compensation of all employees of the
taxpayer during such taxable year,
``(D) the number of employees of the taxpayer who are
receiving excessive compensation during such taxable year,
and
``(E) the amount of compensation of each employee described
in subparagraph (D) during such taxable year.
Such report shall be filed at such time and in such manner as
the Secretary may require.
``(t) Fines Relating to Executive Compensation.--No
deduction shall be allowed under this chapter for any fine
paid to the Securities and Exchange Commission under section
16(h)(4) of the Securities Exchange Act of 1934.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to taxable years beginning after the date of
enactment of this Act.
(b) Amendment to the Securities Exchange Act of 1934.--
(1) In general.--Section 16 of the Securities Exchange Act
of 1934 (15 U.S.C. 78p) is amended by adding at the end the
following:
``(h) Shareholder Approval of Executive Compensation.--
``(1) Calculation of compensation.--For purposes of this
subsection, the term `compensation' includes wages, salary,
fees, commissions, fringe benefits, deferred compensation,
retirement contributions, options, bonuses, property, and any
other form of remuneration that the Commission, in
consultation with the Secretary of the Treasury, determines
is appropriate.
``(2) Limitation.--
``(A) In general.--Except as provided in subparagraph (B),
the compensation paid to an employee of an issuer in any
taxable year may not exceed the lesser of--
``(i) $1,000,000; or
``(ii) an amount that is 25 times the median amount of
compensation paid to all employees of that issuer during that
taxable year.
``(B) Exception.--An issuer may pay compensation described
in subparagraph (A) to an employee of the issuer if, not more
than 18 months before the last day of the taxable year in
which the compensation is paid, not less than 50 percent of
the shareholders of the issuer vote to approve the
compensation through a proxy or consent or authorization for
an annual or other meeting of the shareholders of the issuer.
``(3) Proxy contents.--Proxy materials for a vote described
in paragraph (2)(B) by shareholders of an issuer shall
include, with respect to the most recent taxable year ending
before the date on which the vote takes place--
``(A) the amount of compensation paid to the lowest paid
employee of the issuer;
``(B) the amount of compensation paid to the highest paid
employee of the issuer;
``(C) the median amount of compensation paid to all
employees of the issuer;
``(D) the number of employees of the issuer who are paid
compensation in an amount that is more than 25 times the
amount described in subparagraph (C); and
``(E) the total amount of compensation paid to the
employees described in subparagraph (D).
``(4) Money penalty.--
``(A) In general.--The Commission may impose a civil
penalty against an issuer if--
``(i) the issuer, in a taxable year, pays compensation to
an employee of the issuer in an amount that exceeds the
lesser of--
``(I) $1,000,000; or
``(II) 25 times the median amount of compensation paid to
all employees of that issuer during that taxable year; and
``(ii)(I) the issuer does not conduct a vote described in
paragraph (2)(B) with respect to the compensation described
in clause (i); or
``(II) less than 50 percent of the shareholders of the
issuer vote to approve the compensation described in clause
(i), in contravention of the requirement under paragraph
(2)(B).
``(B) Amount of penalty.--The amount of the penalty imposed
under subparagraph (A) shall be equal to the excess of--
``(i) the compensation described in subparagraph (A)(i);
over
``(ii) the lesser of--
``(I) $1,000,000; or
``(II) the amount that is 25 times the median amount of
compensation paid to all employees of the issuer during the
taxable year in which that compensation is paid to that
employee.''.
(2) Deadline for rulemaking.--Not later than 1 year after
the date of enactment of this Act, the Securities and
Exchange Commission shall issue any final rules and
regulations required to carry out subsection (h) of section
16 of the Securities Exchange Act of 1934 (15 U.S.C. 78p), as
added by paragraph (1) of this subsection.
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