[Congressional Record (Bound Edition), Volume 155 (2009), Part 15]
[House]
[Pages 20396-20398]
[From the U.S. Government Publishing Office, www.gpo.gov]




   PROVIDING FOR CONSIDERATION OF H.R. 3269, CORPORATE AND FINANCIAL 
             INSTITUTION COMPENSATION FAIRNESS ACT OF 2009

  Mr. McGOVERN. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 697 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 697

       Resolved, That upon the adoption of this resolution it 
     shall be in order to consider in the House the bill (H.R. 
     3269) to amend the Securities Exchange Act of 1934 to provide 
     shareholders with an advisory vote on executive compensation 
     and to prevent perverse incentives in the compensation 
     practices of financial institutions. The first reading of the 
     bill shall be dispensed with. All points of order against 
     consideration of the bill are waived except those arising 
     under clause 9 or 10 of rule XXI. The amendment in the nature 
     of a substitute recommended by the Committee on Financial 
     Services now printed in the bill shall be considered as 
     adopted. The bill, as amended, shall be considered as read. 
     All points of order against provisions of the bill, as 
     amended, are waived. The previous question shall be 
     considered as ordered on the bill, as amended, to final 
     passage without intervening motion except: (1) one hour of 
     debate equally divided and controlled by the chairman and 
     ranking minority member of the Committee on the Financial 
     Services; (2) the amendment printed in the report of the 
     Committee on Rules accompanying this resolution, if offered 
     by Representative Frank of Massachusetts or his designee, 
     which shall be considered as read, shall be separately 
     debatable for 10 minutes equally divided and controlled by 
     the proponent and an opponent, and shall not be subject to a 
     demand for division of the question; (3) the amendment in the 
     nature of a substitute printed in the report of the Committee 
     on Rules, if offered by Representative Garrett of New Jersey 
     or his designee, which shall be considered as read, and shall 
     be separately debatable for 30 minutes equally divided and 
     controlled by the proponent and an opponent; and (4) one 
     motion to recommit with or without instructions.
       Sec. 2.  All points of order against amendments printed in 
     the report of the Committee on Rules accompanying this 
     resolution are waived except those arising under clause 9 or 
     10 of rule XXI.
       Sec. 3.  During consideration of an amendment printed in 
     the report of the Committee on Rules accompanying this 
     resolution, the Chair may postpone the question of adoption 
     as though under clause 8 of rule XX.
       Sec. 4.  In the engrossment of H.R. 3269, the Clerk is 
     authorized to make technical and conforming changes to 
     amendatory instructions.

  The SPEAKER pro tempore. The gentleman from Massachusetts is 
recognized for 1 hour.
  Mr. McGOVERN. Mr. Speaker, for the purposes of debate only, I yield 
the customary 30 minutes to the gentleman from Texas (Mr. Sessions). 
All time yielded during consideration of the rule is for debate only.


                             General Leave

  Mr. McGOVERN. Mr. Speaker, I ask unanimous consent that all Members 
may be given 5 legislative days in which to revise and extend their 
remarks on House Resolution 697.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  Mr. McGOVERN. I yield myself such time as I may consume.
  Mr. Speaker, House Resolution 697 provides for the consideration of 
H.R. 3269, the Corporate and Financial Institution Compensation 
Fairness Act of 2009, under a structured rule.
  The rule provides 1 hour of general debate controlled by the 
Committee on Financial Services. The rule makes in order an amendment 
by Chairman Frank, which is debatable for 10 minutes. It also makes in 
order an amendment in the nature of a substitute by Representative 
Garrett, which is debatable for 30 minutes. The rule provides one 
motion to recommit with or without instructions.
  Mr. Speaker, I rise today in support of H.R. 3269, the Corporate and 
Financial Institution Compensation Fairness Act. I would like to 
congratulate my good friend and my colleague from Massachusetts, 
Chairman Barney Frank, for all of his hard work on this bill.

                              {time}  0930

  Mr. Speaker, if the last year has taught us anything, it's that the 
compensation practices of some of our largest corporations have gotten 
completely out of control. Middle class Americans on Main Street are 
struggling to hold on to their jobs, struggling to pay for health care 
and education and food and energy. They have

[[Page 20397]]

seen their wages stagnate while their costs have skyrocketed.
  Meanwhile, over on Easy Street, things are great. Corporate 
executives are continuing to give themselves multi-million dollar pay 
packages; the golden parachutes are still flying. One of the most 
egregious cases of this came when American taxpayers watched as AIG, 
the American International Group, doled out lavish bonuses after being 
bailed out of the financial mess that they helped create.
  Chairman Frank is thoroughly committed to ensuring our financial 
system remains sound, and I am pleased to see this bill as the first 
piece of larger reforms by the House Financial Services Committee.
  Mr. Speaker, I would also like to voice my support for the proposed 
Consumer Financial Protection Agency. I know there has been strong 
pushback from the industry, but I would like to commend my colleagues 
for their perseverance in putting these protections in place. The bill 
will help to give the owners of these corporations, the shareholders, a 
meaningful voice in how companies are run. Specifically, this bill 
grants shareholders a say on pay for top executives by guaranteeing 
them a non-binding advisory vote on their company's pay practices. 
Again this vote is nonbinding.
  The board of directors and the compensation committees are free to 
ignore their shareholders' wishes, but those shareholders will at least 
have the opportunity to express their views.
  The bill would also strengthen the ability of Federal regulators, 
namely, the Federal Reserve and Federal Deposit Insurance Corporation, 
to restrict pay structures that encourage inappropriate risk at 
financial companies. If regulators see a large company driving itself 
off a cliff by employing unstable pay practices for top executives, 
they should have the ability to act.
  I'm pleased that the Financial Services Committee adopted a number of 
amendments. To note one in particular, Mr. Hensarling, my Republican 
colleague from Texas, recognized the need to take the size of the 
institution into account. His amendment to exempt financial 
institutions with assets of less than $1 billion from the bill's 
incentive base compensation disclosure requirements and related 
compensation structure oversight was adopted in committee.
  I look forward to the debate on this bill and on the Republican 
substitute which is made in order under this rule.
  I urge my colleagues to send a strong message that the misbehavior in 
corporate America must come to an end by supporting this bill.
  I reserve my time.
  Mr. SESSIONS. Mr. Speaker, I appreciate the gentleman from 
Massachusetts, my friend Mr. McGovern, for yielding me the time this 
morning. And I would yield myself such time as I may consume.
  Mr. Speaker, I rise in opposition to this rule and to the underlying 
legislation. The structured rule does not call for the open and honest 
debate that we really had been promised years ago by our Democrat 
colleagues to have an open, honest debate on the issues that are before 
this country. But once again, time in and time out, here we are without 
an open rule.
  Mr. Speaker, it's my intention today to discuss the dangerous 
precedent that this legislation sets forth on the future of business in 
America and the stranglehold that government will have over the free 
enterprise system.
  Additionally, I offered two amendments in the Rules Committee last 
night, and I will discuss those here today. One would ensure this 
legislation would not create a bonanza for trial lawyers, and the other 
would provide for the necessary transparency and disclosure for 
shareholders. Both were rejected by the Democrats of the Rules 
Committee and eliminated from debate on the House floor today.
  Mr. Speaker, government takeover of the free enterprise system seems 
to be a common theme with this Democrat Congress and with the Obama 
administration, a theme that has led to record deficits and record 
unemployment. This underlying legislation has masked itself as a bill 
to restrict CEO pay by giving shareholders a nonbinding vote on 
executive compensation. Yet in reality, it gives the government broad 
authority to review and determine appropriate compensation for every 
employee of a financial firm.
  This legislation empowers the Federal Government to set unprecedented 
standards for annual shareholder votes while providing broad government 
authority for regulators who will have guidance to implement this and 
give authority to them over the free enterprise system.
  We all agree that we need to curb abuses of the past and to promote 
responsible approaches to executive compensation. But this bill 
provides unprecedented government intervention in the free enterprise 
system. It is the wrong solution. The goal of regulatory reform should 
be to help, not hinder, our economy's ability to sustain economic 
growth and job creation.
  This legislation does the opposite by legislating a one-size-fits-all 
rule for public companies that discourage private firms from going 
public. This will limit U.S. companies' access to the capital markets 
and undermine U.S. economic competitiveness. This legislation allows 
financial regulators the authority to determine wages for all 
employees, not just CEOs, officers, and bankers, but everyone.
  The rank and file of community banks, minority banks, and credit 
unions could all have their compensation determined by unelected 
Washington bureaucrats. This perception undermines the confidence in 
corporate America and unfairly taints the vast majority of U.S. 
companies.
  In an effort to provide the clarification necessary to ensure the 
intent of this legislation is not to create a bonanza for trial 
lawyers, I offered an amendment in the Rules Committee. The amendment 
would have clarified that this legislation simply creates no new 
private right of action in our courts, nor would its passage make a 
compensation committee's decisions to uphold its fiduciary 
responsibilities to shareholders subject to any existing private right 
of action.
  Without this amendment, trial lawyers will be able to exploit a new 
opportunity to shake down companies for huge payments by challenging 
any action deemed non-compliant from this non-binding vote. This is a 
commonsense amendment that should have been considered on the House 
floor today, and it should be in the bill as law.
  My second amendment would have provided sunshine and transparency for 
shareholders by requiring a full SEC disclosure about who is financing 
efforts to influence votes on this new congressionally mandated non-
binding shareholder resolution. Put simply, this amendment would 
provide shareholders with access to information about who is spending 
money to influence that vote.
  As Federal candidates, we're obligated to disclose to the Federal 
Election Commission the name, occupation, and amount given from each of 
our donors. We require this because the public interest is advanced by 
letting voters know who funds each candidate's campaign. My amendment 
asks the same disclosure so the shareholders know what people, what 
organization--whether they be labor unions, environmental groups, 
consumer advocates or simply a normal citizen of this country. We need 
to know who is spending money on influencing this new mandatory, non-
binding vote.
  Americans pride themselves on free enterprise choice and a 
marketplace that works for all of us; yet today Congress will pass 
legislation that increases government intervention in the financial 
markets, rations resources, limits consumer choices, and dictates wages 
and prices. In a time of economic recession with record unemployment 
and record deficits, Congress should be enacting legislation to assist 
our economy.
  Mr. Speaker, the motives are clear. This administration and this 
Congress are using policy and regulation to force a government takeover 
of the free enterprise system.
  Mr. Speaker, this Congress should be doing things to encourage 
employment, to encourage people to go back to

[[Page 20398]]

work, to encourage competitiveness, to encourage our country to be 
prepared tomorrow; not to have record unemployment, not to spend more 
money for record debts, but to give America and the free enterprise 
system the chance and opportunity it deserves to flourish in America.
  Mr. Speaker, I encourage my colleagues to vote against this rule and 
the underlying legislation.
  I reserve the balance of my time.
  Mr. McGOVERN. We have no further speakers at this time, and I reserve 
the balance of my time.
  Mr. SESSIONS. Mr. Speaker, in closing, I would like to stress that 
while my friends on the other side of the aisle claim to be protecting 
consumers with this legislation, they refuse to protect all Americans 
in this legislation from trial lawyers benefiting from their tax 
dollars, and they also voted in the committee against transparency and 
accountability.
  Mr. Speaker, as a Nation, we have many, many, many real problems to 
deal with that require leadership and dedication to ensure the future 
of this Nation. We need to provide for jobs, encourage economic growth 
and spur innovation and prosperity of this Nation, not to hamper the 
free enterprise system. This is, without question, further government 
control and muzzling of the free enterprise system. Some argue that 
this legislation is about executive compensation; but in reality, it 
continues to be the government takeover of the free enterprise system.
  I encourage a ``no'' vote on this structured rule and a ``no'' vote 
on the underlying legislation.
  I yield back the balance of my time.
  Mr. McGOVERN. Mr. Speaker, I yield myself the remaining time.
  Mr. Speaker, as we're about to adjourn for the August recess, I think 
it's important to note that this is a Congress that accomplished a 
great deal.
  We have passed 12 of our appropriations bills. We passed the historic 
Recovery and Reinvestment Act, which is keeping teachers and police 
officers employed, and stimulating economic growth throughout this 
country. We have passed an energy bill that, if signed into law, will 
create thousands and thousands of new green jobs as well as free us of 
our dependence on foreign oil. We have extended SCHIP, which means that 
more and more children have access to health care. We passed the Lilly 
Ledbetter Pay Equity Act bill to address the issue of discrimination of 
women in the workplace. Yesterday we passed a food safety bill.
  So we did all of this in spite of resistance and in spite of 
obstructionism by many of my colleagues on the other side of the aisle. 
But I think it is an indication that this is a Congress that has 
accomplished a great deal.
  Let me just say finally, Mr. Speaker, with regard to the underlying 
legislation, that if you like the status quo, if you want to embrace 
the same old, same old when it comes to corporate misbehavior, then 
vote against the rule and vote against the bill. If you want things to 
change, if you want to ensure corporate responsibility, then please 
support the underlying bill championed by Chairman Frank.
  With that Mr. Speaker, I urge a ``yes'' vote on the previous question 
and on the rule.
  I yield back the balance of my time, and I move the previous question 
on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.

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