[House Report 116-336]
[From the U.S. Government Publishing Office]


116th Congress    }                                     {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                     {     116-336

======================================================================



 
                   GREATER ACCOUNTABILITY IN PAY ACT

                                _______
                                

 December 11, 2019.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Ms. Waters, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 4242]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 4242) to amend the Securities Exchange Act of 
1934 to require issuers to disclose information on pay raises 
made to executives and non-executive employees, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Section-by-Section Analysis......................................     3
Hearings.........................................................     4
Committee Consideration..........................................     4
Committee Votes..................................................     4
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     7
Statement of Performance Goals and Objectives....................     7
New Budget Authority and CBO Cost Estimate.......................     7
Committee Cost Estimate..........................................     9
Unfunded Mandate Statement.......................................     9
Advisory Committee...............................................     9
Application of Law to the Legislative Branch.....................     9
Earmark Statement................................................     9
Duplication of Federal Programs..................................     9
Changes to Existing Law..........................................     9

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Greater Accountability in Pay Act''.

SEC. 2. PAY RAISE DISCLOSURES.

  Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is 
amended by adding at the end the following:
  ``(s) Pay Raise Disclosures.--An issuer required to file an annual 
report under this section or section 15(d), that is not an emerging 
growth company, shall include in such report--
          ``(1) the percentage increase in the median of the annual 
        total compensation of all executive officers (as such term is 
        defined in section 240.3b-7 of title 17, Code of Federal 
        Regulations) of the issuer over the last completed fiscal year;
          ``(2) the percentage increase in the median of the annual 
        total compensation of all employees of the issuer, excluding 
        executive officers, over the last completed fiscal year;
          ``(3) the ratio of the percentage described in paragraph (1) 
        to the percentage described in paragraph (2);
          ``(4) a comparison of the percentage described in paragraph 
        (1) to the percentage change over the same period in the 
        Consumer Price Index for All Urban Consumers published by the 
        Bureau of Labor Statistics of the Department of Labor; and
          ``(5) a comparison of the percentage described in paragraph 
        (2) to the percentage change over the same period in the 
        Consumer Price Index for All Urban Consumers published by the 
        Bureau of Labor Statistics of the Department of Labor.''.

                          Purpose and Summary

    On September 6, 2019, Representative Nydia Velazquez 
introduced H.R. 4242, the Greater Accountability in Pay Act of 
2019. H.R. 4242 would require public companies to annually 
disclose the percentage increase in the median of the annual 
total compensation of all executives and the percentage 
increase in the median of the annual total compensation of all 
employees, excluding the executives. This bill would also 
require public companies to disclose how these two pay raise 
percentages compare to the rate of inflation, as well as, the 
ratio between the two pay raise percentages.

                  Background and Need for Legislation

    Income inequality is a growing concern both worldwide and 
in the United States. Federal Reserve Chairman Jerome Powell 
has described the problem of income inequality as one of the 
biggest challenges facing the United States, stating that ``the 
US lags now in [economic] mobility.''\1\ While compensation of 
corporate executives have continued to rise, median worker 
wages have remained stagnant. In fact, a recent Pew Research 
Center study shows that today's real average wage has about the 
same purchasing power as it did 40 years ago.\2\ However, 
compensation for companies' Chief Executive Officers (CEOs) now 
dwarfs that of employees. According to an analysis of the 
largest 350 U.S. firms ranked by sales by the Economic Policy 
Institute, in 1965 the average CEO was paid 20 times the 
average worker.\3\ In 1989 the average CEO was paid 58 times 
the average worker. In 2017, CEO compensation surged, with the 
average CEO receiving 312 times that of the average worker. 
This trend is the result, in part, of workers' wages not 
keeping pace with inflation, while executives have received 
yearly salary raises. For example, according to the Economic 
Policy Institute, the average CEO from one of the 350 largest 
firms received a 17.6% raise in 2017, while the typical worker 
in those same firms received just a 0.3% raise.\4\
---------------------------------------------------------------------------
    \1\Transcript of Teach Town Hall, Federal Reserve Board of 
Governors (Feb. 6, 2019), available at https://www.federalreserve.gov/
mediacenter/files/teacher-town-hall-transcript-20190206.pdf.
    \2\Drew Desilver, For Most U.S. Workers, Real Wages Have Barely 
Budged in Decades, Pew Research Center (Aug. 7, 2018), available at 
https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-
real-wages-have-barely-budged-for-decades/
    \3\Lawrence Mishel and Jessica Schieder, CEO Compensation Surged in 
2017, Economic Policy Institute (Aug. 16, 2018), available at https://
www.epi.org/publication/ceo-compensation-surged-in-2017/.
    \4\Id.
---------------------------------------------------------------------------
    A representative of the AFL-CIO testified before the 
Subcommittee on Investor Protection, Entrepreneurship, and 
Capital Markets that ``there is a substantial body of research 
that shows correlations between out-of-balance pay ratios and a 
number of poor performance indicators--in particular, the 
morale of the workforce, as well as its productivity and 
loyalty--while balanced pay ratios are indicators of strong 
long-term performance.'' Because of the importance that pay 
ratios have on a company's long-term performance, the 
representative noted that investors need this type of 
information ``[i]n order to be the rational decision makers 
that the market expects investors to be.'' In addition, Steven 
Clifford, former CEO of King Broadcasting and former CEO of 
National Mobile Television, testified, ``I support all 
legislation that would help constrain excessive CEO pay and 
buybacks, so therefore I am in favor of legislation to require 
disclosure of information on pay raises made to executives and 
non-executive employees . . .'' In addition to Mr. Clifford, 
this bill is supported by Public Citizen, AFL-CIO, and 
Americans for Financial Reform.

                      Section-by-Section Analysis


Section 1. Short title

    This section states that the short title of the bill is the 
Greater Accountability in Pay Act of 2019.

Section 2. Pay raise disclosures

    Section 2 amends Section 13 of the Securities Exchange Act 
of 1934 by adding a new subsection (s) that requires companies, 
other than emerging growth companies, to file annual reports 
with the SEC under this section or section 15(d) to report the 
following information related to pay raises.
    Paragraph (1) of the new subsection (s) requires companies 
to disclose the percentage increase in the median of the annual 
total compensation of all executive officers over the last 
completed fiscal year;
    Paragraph (2) of the new subsection (s) requires companies 
to disclose the percentage increase in the median of the annual 
total compensation of all employees, excluding executive 
officers, over the last completed fiscal year;
    Paragraph (3) of the new subsection (s) requires companies 
to disclose the ratio of the percentage described in paragraph 
(1) to the percentage described in paragraph (2).
    Paragraph (4) of the new subsection (s) requires companies 
to disclose a comparison of the percentage increase described 
in paragraph (1) to the percentage change in the Consumer Price 
Index for All Urban Consumers published by the Department of 
Labor;
    Paragraph (5) of the new subsection (s) requires companies 
to disclose the percentage increase described in paragraph (2) 
to the percentage change in the Consumer Price Index for All 
Urban Consumers published by the Department of Labor.

                                Hearings

    For the purposes of section 103(i) of H. Res. 6 for the 
116th Congress, the Committee on Financial Services' 
Subcommittee on Investor Protection, Entrepreneurship, and 
Capital Markets held a hearing to consider H.R. 4242 entitled, 
``Promoting Economic Growth: A Review of Proposals to 
Strengthen the Rights and Protection for Workers,'' on May 15, 
2019. Testifying before the Committee was Steve Clifford, 
Author and former CEO of King Broadcasting Company; Heather 
Slavkin Corzo, Director of Capital Markets Policy, AFL-CIO; 
Abigail Disney, Ph.D., President of Fork Films and Chair and 
Co-founder of Level Forward; Nili Gilbert, Co-founder and 
Portfolio Manager, Matarin Capital Management; and James R. 
Copland, Senior Fellow and Director, Legal Policy, Manhattan 
Institute for Policy Research.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
September 18, 2019 and ordered H.R. 4242 to be reported 
favorably to the House 32-21.

                  Committee Votes and Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 4242.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

             Statement of Performance Goals and Objectives

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, the goals of H.R. 4242 are to ensure 
that would require public companies to annually disclose the 
percentage increase in the median of the annual total 
compensation of all executives and the percentage increase in 
the median of the annual total compensation of all employees, 
among other things.

               New Budget Authority and CBO Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, and pursuant to clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following estimate for 
H.R. 4242 from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 29, 2019.
Hon. Maxine Waters,
Chairwoman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Madam Chairwoman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4242, the Greater 
Accountability in Pay Act of 2019.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is David Hughes.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    H.R. 4242 would require public companies to annually 
disclose the percentage increase in pay for the median 
compensation of its executives and all other employees over the 
past year and to compare those increases with each other and 
with the percentage change in annual inflation. Emerging growth 
companies would be exempt from those requirements.
    Using information from the Securities and Exchange 
Commission (SEC), CBO estimates that issuing rules to implement 
the bill would cost the SEC $1 million in 2020 for three 
employees at an average cost of $260,000 each. However, because 
the SEC is authorized to collect fees sufficient to offset its 
annual appropriation, CBO expects that the net effect on 
discretionary spending would be negligible, assuming 
appropriation actions consistent with that authority.
    Requiring public companies to annually disclose salary 
information to the SEC would impose a private-sector mandate as 
defined in the Unfunded Mandates Reform Act (UMRA). The 
incremental cost of the mandate would be small because the 
mandated entities generally already possess or collect the 
information to be reported under the bill. Thus CBO estimates 
that the cost of the mandates would be well below the threshold 
established in UMRA ($164 million in 2019, adjusted annually 
for inflation).
    If the SEC increased fees to offset the costs associated 
with implementing the bill, H.R. 4242 would increase the cost 
of an existing mandate on private entities required to pay 
those assessments. CBO estimates that the incremental cost of 
the mandate would be small.
    H.R. 4242 contains no intergovernmental mandates as defined 
in UMRA.
    The CBO staff contacts for this estimate are David Hughes 
(for federal costs) and Rachel Austin (for mandates). The 
estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 4242. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act (as amended by Section 101(a)(2) of the 
Unfunded Mandates Reform Act, Pub. L. 104-4), the Committee 
adopts as its own the estimate of federal mandates regarding 
H.R. 4242, as amended, prepared by the Director of the 
Congressional Budget Office.

                           Advisory Committee

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

              Application of Law to the Legislative Branch

    Pursuant to section 102(b)(3) of the Congressional 
Accountability Act, Pub. L. No. 104-1, H.R. 4242, as amended, 
does not apply to terms and conditions of employment or to 
access to public services or accommodations within the 
legislative branch.

                           Earmark Statement

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 4242 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R. 4242 establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                        Changes to Existing Law

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 4242, as reported, are shown as follows:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                    SECURITIES EXCHANGE ACT OF 1934


TITLE I--REGULATION OF SECURITIES EXCHANGES

           *       *       *       *       *       *       *



                      periodical and other reports

  Sec. 13. (a) Every issuer of a security registered pursuant 
to section 12 of this title shall file with the Commission, in 
accordance with such rules and regulations as the Commission 
may prescribe as necessary or appropriate for the proper 
protection of investors and to insure fair dealing in the 
security--
          (1) such information and documents (and such copies 
        thereof) as the Commission shall require to keep 
        reasonably current the information and documents 
        required to be included in or filed with an application 
        or registration statement filed pursuant to section 12, 
        except that the Commission may not require the filing 
        of any material contract wholly executed before July 1, 
        1962.
          (2) such annual reports (and such copies thereof), 
        certified if required by the rules and regulations of 
        the Commission by independent public accountants, and 
        such quarterly reports (and such copies thereof), as 
        the Commission may prescribe.
Every issuer of a security registered on a national securities 
exchange shall also file a duplicate original of such 
information, documents, and reports with the exchange. In any 
registration statement, periodic report, or other reports to be 
filed with the Commission, an emerging growth company need not 
present selected financial data in accordance with section 
229.301 of title 17, Code of Federal Regulations, for any 
period prior to the earliest audited period presented in 
connection with its first registration statement that became 
effective under this Act or the Securities Act of 1933 and, 
with respect to any such statement or reports, an emerging 
growth company may not be required to comply with any new or 
revised financial accounting standard until such date that a 
company that is not an issuer (as defined under section 2(a) of 
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a))) is required 
to comply with such new or revised accounting standard, if such 
standard applies to companies that are not issuers.
  (b)(1) The Commission may prescribe, in regard to reports 
made pursuant to this title, the form or forms in which the 
required information shall be set forth, the items or details 
to be shown in the balance sheet and the earnings statement, 
and the methods to be followed in the preparation of reports, 
in the appraisal or valuation of assets and liabilities, in the 
determination of depreciation and depletion, in the 
differentiation of recurring and nonrecurring income, in the 
differentiation of investment and operating income, and in the 
preparation, where the Commission deems it necessary or 
desirable, of separate and/or consolidated balance sheets or 
income accounts of any person directly or indirectly 
controlling or controlled by the issuer, or any person under 
direct or indirect common control with the issuer; but in the 
case of the reports of any person whose methods of accounting 
are prescribed under the provisions of any law of the United 
States, or any rule or regulation thereunder, the rules and 
regulations of the Commission with respect to reports shall not 
be inconsistent with the requirements imposed by such law or 
rule or regulation in respect of the same subject matter 
(except that such rules and regulations of the Commission may 
be inconsistent with such requirements to the extent that the 
Commission determines that the public interest or the 
protection of investors so requires).
  (2) Every issuer which has a class of securities registered 
pursuant to section 12 of this title and every issuer which is 
required to file reports pursuant to section 15(d) of this 
title shall--
          (A) make and keep books, records, and accounts, 
        which, in reasonable detail, accurately and fairly 
        reflect the transactions and dispositions of the assets 
        of the issuer;
          (B) devise and maintain a system of internal 
        accounting controls sufficient to provide reasonable 
        assurances that--
                  (i) transactions are executed in accordance 
                with management's general or specific 
                authorization;
                  (ii) transactions are recorded as necessary 
                (I) to permit preparation of financial 
                statements in conformity with generally 
                accepted accounting principles or any other 
                criteria applicable to such statements, and 
                (II) to maintain accountability for assets;
                  (iii) access to assets is permitted only in 
                accordance with management's general or 
                specific authorization; and
                  (iv) the recorded accountability for assets 
                is compared with the existing assets at 
                reasonable intervals and appropriate action is 
                taken with respect to any differences; and
          (C) notwithstanding any other provision of law, pay 
        the allocable share of such issuer of a reasonable 
        annual accounting support fee or fees, determined in 
        accordance with section 109 of the Sarbanes-Oxley Act 
        of 2002.
  (3)(A) With respect to matters concerning the national 
security of the United States, no duty or liability under 
paragraph (2) of this subsection shall be imposed upon any 
person acting in cooperation with the head of any Federal 
department or agency responsible for such matters if such act 
in cooperation with such head of a department or agency was 
done upon the specific, written directive of the head of such 
department or agency pursuant to Presidential authority to 
issue such directives. Each directive issued under this 
paragraph shall set forth the specific facts and circumstances 
with respect to which the provisions of this paragraph are to 
be invoked. Each such directive shall, unless renewed in 
writing, expire one year after the date of issuance.
  (B) Each head of a Federal department or agency of the United 
States who issues a directive pursuant to this paragraph shall 
maintain a complete file of all such directives and shall, on 
October 1 of each year, transmit a summary of matters covered 
by such directives in force at any time during the previous 
year to the Permanent Select Committee on Intelligence of the 
House of Representatives and the Select Committee on 
Intelligence of the Senate.
  (4) No criminal liability shall be imposed for failing to 
comply with the requirements of paragraph (2) of this 
subsection except as provided in paragraph (5) of this 
subsection.
  (5) No person shall knowingly circumvent or knowingly fail to 
implement a system of internal accounting controls or knowingly 
falsify any book, record, or account described in paragraph 
(2).
  (6) Where an issuer which has a class of securities 
registered pursuant to section 12 of this title or an issuer 
which is required to file reports pursuant to section 15(d) of 
this title holds 50 per centum or less of the voting power with 
respect to a domestic or foreign firm, the provisions of 
paragraph (2) require only that the issuer proceed in good 
faith to use its influence, to the extent reasonable under the 
issuer's circumstances, to cause such domestic or foreign firm 
to devise and maintain a system of internal accounting controls 
consistent with paragraph (2). Such circumstances include the 
relative degree of the issuer's ownership of the domestic or 
foreign firm and the laws and practices governing the business 
operations of the country in which such firm is located. An 
issuer which demonstrates good faith efforts to use such 
influence shall be conclusively presumed to have complied with 
the requirements of paragraph (2).
  (7) For the purpose of paragraph (2) of this subsection, the 
terms ``reasonable assurances'' and ``reasonable detail'' mean 
such level of detail and degree of assurance as would satisfy 
prudent officials in the conduct of their own affairs.
  (c) If in the judgment of the Commission any report required 
under subsection (a) is inapplicable to any specified class or 
classes of issuers, the Commission shall require in lieu 
thereof the submission of such reports of comparable character 
as it may deem applicable to such class or classes of issuers.
  (d)(1) Any person who, after acquiring directly or indirectly 
the beneficial ownership of any equity security of a class 
which is registered pursuant to section 12 of this title, or 
any equity security of an insurance company which would have 
been required to be so registered except for the exemption 
contained in section 12(g)(2)(G) of this title, or any equity 
security issued by a closed-end investment company registered 
under the Investment Company Act of 1940 or any equity security 
issued by a Native Corporation pursuant to section 37(d)(6) of 
the Alaska Native Claims Settlement Act, or otherwise becomes 
or is deemed to become a beneficial owner of any of the 
foregoing upon the purchase or sale of a security-based swap 
that the Commission may define by rule, and is directly or 
indirectly the beneficial owner of more than 5 per centum of 
such class shall, within ten days after such acquisition or 
within such shorter time as the Commission may establish by 
rule, file with the Commission, a statement containing such of 
the following information, and such additional information, as 
the Commission may by rules and regulations, prescribe as 
necessary or appropriate in the public interest or for the 
protection of investors--
          (A) the background, and identity, residence, and 
        citizenship of, and the nature of such beneficial 
        ownership by, such person and all other persons by whom 
        or on whose behalf the purchases have been or are to be 
        effected;
          (B) the source and amount of the funds or other 
        consideration used or to be used in making the 
        purchases, and if any part of the purchase price is 
        represented or is to be represented by funds or other 
        consideration borrowed or otherwise obtained for the 
        purpose of acquiring, holding, or trading such 
        security, a description of the transaction and the 
        names of the parties thereto, except that where a 
        source of funds is a loan made in the ordinary course 
        of business by a bank, as defined in section 3(a)(6) of 
        this title, if the person filing such statement so 
        requests, the name of the bank shall not be made 
        available to the public;
          (C) if the purpose of the purchases or prospective 
        purchases is to acquire control of the business of the 
        issuer of the securities any plans or proposals which 
        such persons may have to liquidate such issuer, to sell 
        its assets to or merge it with any other persons, or to 
        make any other major change in its business or 
        corporate structure;
          (D) the number of shares of such security which are 
        beneficially owned, and the number of shares concerning 
        which there is a right to acquire, directly or 
        indirectly, by (i) such person, and (ii) by each 
        associate of such person, giving the background, 
        identity, residence, and citizenship of each such 
        associate; and
          (E) information as to any contracts, arrangements, or 
        understandings with any person with respect to any 
        securities of the issuer, including but not limited to 
        transfer of any of the securities, joint ventures, loan 
        or option arrangements, puts or calls, guaranties of 
        loans, guaranties against loss or guaranties of 
        profits, division of losses or profits, or the giving 
        or withholding of proxies, naming the persons with whom 
        such contracts, arrangements, or understandings have 
        been entered into, and giving the details thereof.
  (2) If any material change occurs in the facts set forth in 
the statement filed with the Commission, an amendment shall be 
filed with the Commission, in accordance with such rules and 
regulations as the Commission may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors.
  (3) When two or more persons act as a partnership, limited 
partnership, syndicate, or other group for the purpose of 
acquiring, holding, or disposing of securities of an issuer, 
such syndicate or group shall be deemed a ``person'' for the 
purposes of this subsection.
  (4) In determining, for purposes of this subsection, any 
percentage of a class of any security, such class shall be 
deemed to consist of the amount of the outstanding securities 
of such class, exclusive of any securities of such class held 
by or for the account of the issuer or a subsidiary of the 
issuer.
  (5) The Commission, by rule or regulation or by order, may 
permit any person to file in lieu of the statement required by 
paragraph (1) of this subsection or the rules and regulations 
thereunder, a notice stating the name of such person, the 
number of shares of any equity securities subject to paragraph 
(1) which are owned by him, the date of their acquisition and 
such other information as the Commission may specify, if it 
appears to the Commission that such securities were acquired by 
such person in the ordinary course of his business and were not 
acquired for the purpose of and do not have the effect of 
changing or influencing the control of the issuer nor in 
connection with or as a participant in any transaction having 
such purpose or effect.
  (6) The provisions of this subsection shall not apply to--
          (A) any acquisition or offer to acquire securities 
        made or proposed to be made by means of a registration 
        statement under the Securities Act of 1933;
          (B) any acquisition of the beneficial ownership of a 
        security which, together with all other acquisitions by 
        the same person of securities of the same class during 
        the preceding twelve months, does not exceed 2 per 
        centum of that class;
          (C) any acquisition of an equity security by the 
        issuer of such security;
          (D) any acquisition or proposed acquisition of a 
        security which the Commission, by rules or regulations 
        or by order, shall exempt from the provisions of this 
        subsection as not entered into for the purpose of, and 
        not having the effect of, changing or influencing the 
        control of the issuer or otherwise as not comprehended 
        within the purposes of this subsection.
  (e)(1) It shall be unlawful for an issuer which has a class 
of equity securities registered pursuant to section 12 of this 
title, or which is a closed-end investment company registered 
under the Investment Company Act of 1940, to purchase any 
equity security issued by it if such purchase is in 
contravention of such rules and regulations as the Commission, 
in the public interest or for the protection of investors, may 
adopt (A) to define acts and practices which are fraudulent, 
deceptive, or manipulative, and (B) to prescribe means 
reasonably designed to prevent such acts and practices. Such 
rules and regulations may require such issuer to provide 
holders of equity securities of such class with such 
information relating to the reasons for such purchase, the 
source of funds, the number of shares to be purchased, the 
price to be paid for such securities, the method of purchase, 
and such additional information, as the Commission deems 
necessary or appropriate in the public interest or for the 
protection of investors, or which the Commission deems to be 
material to a determination whether such security should be 
sold.
  (2) For the purpose of this subsection, a purchase by or for 
the issuer or any person controlling, controlled by, or under 
common control with the issuer, or a purchase subject to 
control of the issuer or any such person, shall be deemed to be 
a purchase by the issuer. The Commission shall have power to 
make rules and regulations implementing this paragraph in the 
public interest and for the protection of investors, including 
exemptive rules and regulations covering situations in which 
the Commission deems it unnecessary or inappropriate that a 
purchase of the type described in this paragraph shall be 
deemed to be a purchase by the issuer for purposes of some or 
all of the provisions of paragraph (1) of this subsection.
  (3) At the time of filing such statement as the Commission 
may require by rule pursuant to paragraph (1) of this 
subsection, the person making the filing shall pay to the 
Commission a fee at a rate that, subject to paragraph (4), is 
equal to $92 per $1,000,000 of the value of securities proposed 
to be purchased. The fee shall be reduced with respect to 
securities in an amount equal to any fee paid with respect to 
any securities issued in connection with the proposed 
transaction under section 6(b) of the Securities Act of 1933, 
or the fee paid under that section shall be reduced in an 
amount equal to the fee paid to the Commission in connection 
with such transaction under this paragraph.
          (4) Annual adjustment.--For each fiscal year, the 
        Commission shall by order adjust the rate required by 
        paragraph (3) for such fiscal year to a rate that is 
        equal to the rate (expressed in dollars per million) 
        that is applicable under section 6(b) of the Securities 
        Act of 1933 for such fiscal year.
          (5) Fee collections.--Fees collected pursuant to this 
        subsection for fiscal year 2012 and each fiscal year 
        thereafter shall be deposited and credited as general 
        revenue of the Treasury and shall not be available for 
        obligation.
          (6) Effective date; publication.--In exercising its 
        authority under this subsection, the Commission shall 
        not be required to comply with the provisions of 
        section 553 of title 5, United States Code. An adjusted 
        rate prescribed under paragraph (4) shall be published 
        and take effect in accordance with section 6(b) of the 
        Securities Act of 1933 (15 U.S.C. 77f(b)).
          (7) Pro rata application.--The rates per $1,000,000 
        required by this subsection shall be applied pro rata 
        to amounts and balances of less than $1,000,000.
  (f)(1) Every institutional investment manager which uses the 
mails, or any means or instrumentality of interstate commerce 
in the course of its business as an institutional investment 
manager and which exercises investment discretion with respect 
to accounts holding equity securities of a class described in 
section 13(d)(1) of this title having an aggregate fair market 
value on the last trading day in any of the preceding twelve 
months of at least $100,000,000 or such lesser amount (but in 
no case less than $10,000,000) as the Commission, by rule, may 
determine, shall file reports with the Commission in such form, 
for such periods, and at such times after the end of such 
periods as the Commission, by rule, may prescribe, but in no 
event shall such reports be filed for periods longer than one 
year or shorter than one quarter. Such reports shall include 
for each such equity security held on the last day of the 
reporting period by accounts (in aggregate or by type as the 
Commission, by rule, may prescribe) with respect to which the 
institutional investment manager exercises investment 
discretion (other than securities held in amounts which the 
Commission, by rule, determines to be insignificant for 
purposes of this subsection), the name of the issuer and the 
title, class, CUSIP number, number of shares or principal 
amount, and aggregate fair market value of each such security. 
Such reports may also include for accounts (in aggregate or by 
type) with respect to which the institutional investment 
manager exercises investment discretion such of the following 
information as the Commission, by rule, prescribes--
          (A) the name of the issuer and the title, class, 
        CUSIP number, number of shares or principal amount, and 
        aggregate fair market value or cost or amortized cost 
        of each other security (other than an exempted 
        security) held on the last day of the reporting period 
        by such accounts;
          (B) the aggregate fair market value or cost or 
        amortized cost of exempted securities (in aggregate or 
        by class) held on the last day of the reporting period 
        by such accounts;
          (C) the number of shares of each equity security of a 
        class described in section 13(d)(1) of this title held 
        on the last day of the reporting period by such 
        accounts with respect to which the institutional 
        investment manager possesses sole or shared authority 
        to exercise the voting rights evidenced by such 
        securities;
          (D) the aggregate purchases and aggregate sales 
        during the reporting period of each security (other 
        than an exempted security) effected by or for such 
        accounts; and
          (E) with respect to any transaction or series of 
        transactions having a market value of at least $500,000 
        or such other amount as the Commission, by rule, may 
        determine, effected during the reporting period by or 
        for such accounts in any equity security of a class 
        described in section 13(d)(1) of this title--
                  (i) the name of the issuer and the title, 
                class, and CUSIP number of the security;
                  (ii) the number of shares or principal amount 
                of the security involved in the transaction;
                  (iii) whether the transaction was a purchase 
                or sale;
                  (iv) the per share price or prices at which 
                the transaction was effected;
                  (v) the date or dates of the transaction;
                  (vi) the date or dates of the settlement of 
                the transaction;
                  (vii) the broker or dealer through whom the 
                transaction was effected;
                  (viii) the market or markets in which the 
                transaction was effected; and
                  (ix) such other related information as the 
                Commission, by rule, may prescribe.
          (2) The Commission shall prescribe rules providing 
        for the public disclosure of the name of the issuer and 
        the title, class, CUSIP number, aggregate amount of the 
        number of short sales of each security, and any 
        additional information determined by the Commission 
        following the end of the reporting period. At a 
        minimum, such public disclosure shall occur every 
        month.
  (3) The Commission, by rule or order, may exempt, 
conditionally or unconditionally, any institutional investment 
manager or security or any class of institutional investment 
managers or securities from any or all of the provisions of 
this subsection or the rules thereunder.
  (4) The Commission shall make available to the public for a 
reasonable fee a list of all equity securities of a class 
described in section 13(d)(1) of this title, updated no less 
frequently than reports are required to be filed pursuant to 
paragraph (1) of this subsection. The Commission shall tabulate 
the information contained in any report filed pursuant to this 
subsection in a manner which will, in the view of the 
Commission, maximize the usefulness of the information to other 
Federal and State authorities and the public. Promptly after 
the filing of any such report, the Commission shall make the 
information contained therein conveniently available to the 
public for a reasonable fee in such form as the Commission, by 
rule, may prescribe, except that the Commission, as it 
determines to be necessary or appropriate in the public 
interest or for the protection of investors, may delay or 
prevent public disclosure of any such information in accordance 
with section 552 of title 5, United States Code. 
Notwithstanding the preceding sentence, any such information 
identifying the securities held by the account of a natural 
person or an estate or trust (other than a business trust or 
investment company) shall not be disclosed to the public.
  (5) In exercising its authority under this subsection, the 
Commission shall determine (and so state) that its action is 
necessary or appropriate in the public interest and for the 
protection of investors or to maintain fair and orderly markets 
or, in granting an exemption, that its action is consistent 
with the protection of investors and the purposes of this 
subsection. In exercising such authority the Commission shall 
take such steps as are within its power, including consulting 
with the Comptroller General of the United States, the Director 
of the Office of Management and Budget, the appropriate 
regulatory agencies, Federal and State authorities which, 
directly or indirectly, require reports from institutional 
investment managers of information substantially similar to 
that called for by this subsection, national securities 
exchanges, and registered securities associations, (A) to 
achieve uniform, centralized reporting of information 
concerning the securities holdings of and transactions by or 
for accounts with respect to which institutional investment 
managers exercise investment discretion, and (B) consistently 
with the objective set forth in the preceding subparagraph, to 
avoid unnecessarily duplicative reporting by, and minimize the 
compliance burden on, institutional investment managers. 
Federal authorities which, directly or indirectly, require 
reports from institutional investment managers of information 
substantially similar to that called for by this subsection 
shall cooperate with the Commission in the performance of its 
responsibilities under the preceding sentence. An institutional 
investment manager which is a bank, the deposits of which are 
insured in accordance with the Federal Deposit Insurance Act, 
shall file with the appropriate regulatory agency a copy of 
every report filed with the Commission pursuant to this 
subsection.
  (6)(A) For purposes of this subsection the term 
``institutional investment manager'' includes any person, other 
than a natural person, investing in or buying and selling 
securities for its own account, and any person exercising 
investment discretion with respect to the account of any other 
person.
  (B) The Commission shall adopt such rules as it deems 
necessary or appropriate to prevent duplicative reporting 
pursuant to this subsection by two or more institutional 
investment managers exercising investment discretion with 
respect to the same amount.
  (g)(1) Any person who is directly or indirectly the 
beneficial owner of more than 5 per centum of any security of a 
class described in subsection (d)(1) of this section or 
otherwise becomes or is deemed to become a beneficial owner of 
any security of a class described in subsection (d)(1) upon the 
purchase or sale of a security-based swap that the Commission 
may define by ruleshall file with the Commission a statement 
setting forth, in such form and at such time as the Commission 
may, by rule, prescribe--
          (A) such person's identity, residence, and 
        citizenship; and
          (B) the number and description of the shares in which 
        such person has an interest and the nature of such 
        interest.
  (2) If any material change occurs in the facts set forth in 
the statement filed with the Commission, an amendment shall be 
filed with the Commission, in accordance with such rules and 
regulations as the Commission may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors.
  (3) When two or more persons act as a partnership, limited 
partnership, syndicate, or other group for the purpose of 
acquiring, holding, or disposing of securities of an issuer, 
such syndicate or group shall be deemed a ``person'' for the 
purposes of this subsection.
  (4) In determining, for purposes of this subsection, any 
percentage of a class of any security, such class shall be 
deemed to consist of the amount of the outstanding securities 
of such class, exclusive of any securities of such class held 
by or for the account of the issuer or a subsidiary of the 
issuer.
  (5) In exercising its authority under this subsection, the 
Commission shall take such steps as it deems necessary or 
appropriate in the public interest or for the protection of 
investors (A) to achieve centralized reporting of information 
regarding ownership, (B) to avoid unnecessarily duplicative 
reporting by and minimize the compliance burden on persons 
required to report, and (C) to tabulate and promptly make 
available the information contained in any report filed 
pursuant to this subsection in a manner which will, in the view 
of the Commission, maximize the usefulness of the information 
to other Federal and State agencies and the public.
  (6) The Commission may, by rule or order, exempt, in whole or 
in part, any person or class of persons from any or all of the 
reporting requirements of this subsection as it deems necessary 
or appropriate in the public interest or for the protection of 
investors.
  (h) Large Trader Reporting.--
          (1) Identification requirements for large traders.--
        For the purpose of monitoring the impact on the 
        securities markets of securities transactions involving 
        a substantial volume or a large fair market value or 
        exercise value and for the purpose of otherwise 
        assisting the Commission in the enforcement of this 
        title, each large trader shall--
                  (A) provide such information to the 
                Commission as the Commission may by rule or 
                regulation prescribe as necessary or 
                appropriate, identifying such large trader and 
                all accounts in or through which such large 
                trader effects such transactions; and
                  (B) identify, in accordance with such rules 
                or regulations as the Commission may prescribe 
                as necessary or appropriate, to any registered 
                broker or dealer by or through whom such large 
                trader directly or indirectly effects 
                securities transactions, such large trader and 
                all accounts directly or indirectly maintained 
                with such broker or dealer by such large trader 
                in or through which such transactions are 
                effected.
          (2) Recordkeeping and reporting requirements for 
        brokers and dealers.--Every registered broker or dealer 
        shall make and keep for prescribed periods such records 
        as the Commission by rule or regulation prescribes as 
        necessary or appropriate in the public interest, for 
        the protection of investors, or otherwise in 
        furtherance of the purposes of this title, with respect 
        to securities transactions that equal or exceed the 
        reporting activity level effected directly or 
        indirectly by or through such registered broker or 
        dealer of or for any person that such broker or dealer 
        knows is a large trader, or any person that such broker 
        or dealer has reason to know is a large trader on the 
        basis of transactions in securities effected by or 
        through such broker or dealer. Such records shall be 
        available for reporting to the Commission, or any self-
        regulatory organization that the Commission shall 
        designate to receive such reports, on the morning of 
        the day following the day the transactions were 
        effected, and shall be reported to the Commission or a 
        self-regulatory organization designated by the 
        Commission immediately upon request by the Commission 
        or such a self-regulatory organization. Such records 
        and reports shall be in a format and transmitted in a 
        manner prescribed by the Commission (including, but not 
        limited to, machine readable form).
          (3) Aggregation rules.--The Commission may prescribe 
        rules or regulations governing the manner in which 
        transactions and accounts shall be aggregated for the 
        purpose of this subsection, including aggregation on 
        the basis of common ownership or control.
          (4) Examination of broker and dealer records.--All 
        records required to be made and kept by registered 
        brokers and dealers pursuant to this subsection with 
        respect to transactions effected by large traders are 
        subject at any time, or from time to time, to such 
        reasonable periodic, special, or other examinations by 
        representatives of the Commission as the Commission 
        deems necessary or appropriate in the public interest, 
        for the protection of investors, or otherwise in 
        furtherance of the purposes of this title.
          (5) Factors to be considered in commission actions.--
        In exercising its authority under this subsection, the 
        Commission shall take into account--
                  (A) existing reporting systems;
                  (B) the costs associated with maintaining 
                information with respect to transactions 
                effected by large traders and reporting such 
                information to the Commission or self-
                regulatory organizations; and
                  (C) the relationship between the United 
                States and international securities markets.
          (6) Exemptions.--The Commission, by rule, regulation, 
        or order, consistent with the purposes of this title, 
        may exempt any person or class of persons or any 
        transaction or class of transactions, either 
        conditionally or upon specified terms and conditions or 
        for stated periods, from the operation of this 
        subsection, and the rules and regulations thereunder.
          (7) Authority of commission to limit disclosure of 
        information.--Notwithstanding any other provision of 
        law, the Commission shall not be compelled to disclose 
        any information required to be kept or reported under 
        this subsection. Nothing in this subsection shall 
        authorize the Commission to withhold information from 
        Congress, or prevent the Commission from complying with 
        a request for information from any other Federal 
        department or agency requesting information for 
        purposes within the scope of its jurisdiction, or 
        complying with an order of a court of the United States 
        in an action brought by the United States or the 
        Commission. For purposes of section 552 of title 5, 
        United States Code, this subsection shall be considered 
        a statute described in subsection (b)(3)(B) of such 
        section 552.
          (8) Definitions.--For purposes of this subsection--
                  (A) the term ``large trader'' means every 
                person who, for his own account or an account 
                for which he exercises investment discretion, 
                effects transactions for the purchase or sale 
                of any publicly traded security or securities 
                by use of any means or instrumentality of 
                interstate commerce or of the mails, or of any 
                facility of a national securities exchange, 
                directly or indirectly by or through a 
                registered broker or dealer in an aggregate 
                amount equal to or in excess of the identifying 
                activity level;
                  (B) the term ``publicly traded security'' 
                means any equity security (including an option 
                on individual equity securities, and an option 
                on a group or index of such securities) listed, 
                or admitted to unlisted trading privileges, on 
                a national securities exchange, or quoted in an 
                automated interdealer quotation system;
                  (C) the term ``identifying activity level'' 
                means transactions in publicly traded 
                securities at or above a level of volume, fair 
                market value, or exercise value as shall be 
                fixed from time to time by the Commission by 
                rule or regulation, specifying the time 
                interval during which such transactions shall 
                be aggregated;
                  (D) the term ``reporting activity level'' 
                means transactions in publicly traded 
                securities at or above a level of volume, fair 
                market value, or exercise value as shall be 
                fixed from time to time by the Commission by 
                rule, regulation, or order, specifying the time 
                interval during which such transactions shall 
                be aggregated; and
                  (E) the term ``person'' has the meaning given 
                in section 3(a)(9) of this title and also 
                includes two or more persons acting as a 
                partnership, limited partnership, syndicate, or 
                other group, but does not include a foreign 
                central bank.
  (i) Accuracy of Financial Reports.--Each financial report 
that contains financial statements, and that is required to be 
prepared in accordance with (or reconciled to) generally 
accepted accounting principles under this title and filed with 
the Commission shall reflect all material correcting 
adjustments that have been identified by a registered public 
accounting firm in accordance with generally accepted 
accounting principles and the rules and regulations of the 
Commission.
  (j) Off-Balance Sheet Transactions.--Not later than 180 days 
after the date of enactment of the Sarbanes-Oxley Act of 2002, 
the Commission shall issue final rules providing that each 
annual and quarterly financial report required to be filed with 
the Commission shall disclose all material off-balance sheet 
transactions, arrangements, obligations (including contingent 
obligations), and other relationships of the issuer with 
unconsolidated entities or other persons, that may have a 
material current or future effect on financial condition, 
changes in financial condition, results of operations, 
liquidity, capital expenditures, capital resources, or 
significant components of revenues or expenses.
  (k) Prohibition on Personal Loans to Executives.--
          (1) In general.--It shall be unlawful for any issuer 
        (as defined in section 2 of the Sarbanes-Oxley Act of 
        2002), directly or indirectly, including through any 
        subsidiary, to extend or maintain credit, to arrange 
        for the extension of credit, or to renew an extension 
        of credit, in the form of a personal loan to or for any 
        director or executive officer (or equivalent thereof) 
        of that issuer. An extension of credit maintained by 
        the issuer on the date of enactment of this subsection 
        shall not be subject to the provisions of this 
        subsection, provided that there is no material 
        modification to any term of any such extension of 
        credit or any renewal of any such extension of credit 
        on or after that date of enactment.
          (2) Limitation.--Paragraph (1) does not preclude any 
        home improvement and manufactured home loans (as that 
        term is defined in section 5 of the Home Owners' Loan 
        Act (12 U.S.C. 1464)), consumer credit (as defined in 
        section 103 of the Truth in Lending Act (15 U.S.C. 
        1602)), or any extension of credit under an open end 
        credit plan (as defined in section 103 of the Truth in 
        Lending Act (15 U.S.C. 1602)), or a charge card (as 
        defined in section 127(c)(4)(e) of the Truth in Lending 
        Act (15 U.S.C. 1637(c)(4)(e)), or any extension of 
        credit by a broker or dealer registered under section 
        15 of this title to an employee of that broker or 
        dealer to buy, trade, or carry securities, that is 
        permitted under rules or regulations of the Board of 
        Governors of the Federal Reserve System pursuant to 
        section 7 of this title (other than an extension of 
        credit that would be used to purchase the stock of that 
        issuer), that is--
                  (A) made or provided in the ordinary course 
                of the consumer credit business of such issuer;
                  (B) of a type that is generally made 
                available by such issuer to the public; and
                  (C) made by such issuer on market terms, or 
                terms that are no more favorable than those 
                offered by the issuer to the general public for 
                such extensions of credit.
          (3) Rule of construction for certain loans.--
        Paragraph (1) does not apply to any loan made or 
        maintained by an insured depository institution (as 
        defined in section 3 of the Federal Deposit Insurance 
        Act (12 U.S.C. 1813)), if the loan is subject to the 
        insider lending restrictions of section 22(h) of the 
        Federal Reserve Act (12 U.S.C. 375b).
  (l) Real Time Issuer Disclosures.--Each issuer reporting 
under section 13(a) or 15(d) shall disclose to the public on a 
rapid and current basis such additional information concerning 
material changes in the financial condition or operations of 
the issuer, in plain English, which may include trend and 
qualitative information and graphic presentations, as the 
Commission determines, by rule, is necessary or useful for the 
protection of investors and in the public interest.
  (m) Public Availability of Security-based Swap Transaction 
Data.--
          (1) In general.--
                  (A) Definition of real-time public 
                reporting.--In this paragraph, the term ``real-
                time public reporting'' means to report data 
                relating to a security-based swap transaction, 
                including price and volume, as soon as 
                technologically practicable after the time at 
                which the security-based swap transaction has 
                been executed.
                  (B) Purpose.--The purpose of this subsection 
                is to authorize the Commission to make 
                security-based swap transaction and pricing 
                data available to the public in such form and 
                at such times as the Commission determines 
                appropriate to enhance price discovery.
                  (C) General rule.--The Commission is 
                authorized to provide by rule for the public 
                availability of security-based swap 
                transaction, volume, and pricing data as 
                follows:
                          (i) With respect to those security-
                        based swaps that are subject to the 
                        mandatory clearing requirement 
                        described in section 3C(a)(1) 
                        (including those security-based swaps 
                        that are excepted from the requirement 
                        pursuant to section 3C(g)), the 
                        Commission shall require real-time 
                        public reporting for such transactions.
                          (ii) With respect to those security-
                        based swaps that are not subject to the 
                        mandatory clearing requirement 
                        described in section 3C(a)(1), but are 
                        cleared at a registered clearing 
                        agency, the Commission shall require 
                        real-time public reporting for such 
                        transactions.
                          (iii) With respect to security-based 
                        swaps that are not cleared at a 
                        registered clearing agency and which 
                        are reported to a security-based swap 
                        data repository or the Commission under 
                        section 3C(a)(6), the Commission shall 
                        require real-time public reporting for 
                        such transactions, in a manner that 
                        does not disclose the business 
                        transactions and market positions of 
                        any person.
                          (iv) With respect to security-based 
                        swaps that are determined to be 
                        required to be cleared under section 
                        3C(b) but are not cleared, the 
                        Commission shall require real-time 
                        public reporting for such transactions.
                  (D) Registered entities and public 
                reporting.--The Commission may require 
                registered entities to publicly disseminate the 
                security-based swap transaction and pricing 
                data required to be reported under this 
                paragraph.
                  (E) Rulemaking required.--With respect to the 
                rule providing for the public availability of 
                transaction and pricing data for security-based 
                swaps described in clauses (i) and (ii) of 
                subparagraph (C), the rule promulgated by the 
                Commission shall contain provisions--
                          (i) to ensure such information does 
                        not identify the participants;
                          (ii) to specify the criteria for 
                        determining what constitutes a large 
                        notional security-based swap 
                        transaction (block trade) for 
                        particular markets and contracts;
                          (iii) to specify the appropriate time 
                        delay for reporting large notional 
                        security-based swap transactions (block 
                        trades) to the public; and
                          (iv) that take into account whether 
                        the public disclosure will materially 
                        reduce market liquidity.
                  (F) Timeliness of reporting.--Parties to a 
                security-based swap (including agents of the 
                parties to a security-based swap) shall be 
                responsible for reporting security-based swap 
                transaction information to the appropriate 
                registered entity in a timely manner as may be 
                prescribed by the Commission.
                  (G) Reporting of swaps to registered 
                security-based swap data repositories.--Each 
                security-based swap (whether cleared or 
                uncleared) shall be reported to a registered 
                security-based swap data repository.
                  (H) Registration of clearing agencies.--A 
                clearing agency may register as a security-
                based swap data repository.
          (2) Semiannual and annual public reporting of 
        aggregate security-based swap data.--
                  (A) In general.--In accordance with 
                subparagraph (B), the Commission shall issue a 
                written report on a semiannual and annual basis 
                to make available to the public information 
                relating to--
                          (i) the trading and clearing in the 
                        major security-based swap categories; 
                        and
                          (ii) the market participants and 
                        developments in new products.
                  (B) Use; consultation.--In preparing a report 
                under subparagraph (A), the Commission shall--
                          (i) use information from security-
                        based swap data repositories and 
                        clearing agencies; and
                          (ii) consult with the Office of the 
                        Comptroller of the Currency, the Bank 
                        for International Settlements, and such 
                        other regulatory bodies as may be 
                        necessary.
                  (C) Authority of commission.--The Commission 
                may, by rule, regulation, or order, delegate 
                the public reporting responsibilities of the 
                Commission under this paragraph in accordance 
                with such terms and conditions as the 
                Commission determines to be appropriate and in 
                the public interest.
  (n) Security-based Swap Data Repositories.--
          (1) Registration requirement.--It shall be unlawful 
        for any person, unless registered with the Commission, 
        directly or indirectly, to make use of the mails or any 
        means or instrumentality of interstate commerce to 
        perform the functions of a security-based swap data 
        repository.
          (2) Inspection and examination.--Each registered 
        security-based swap data repository shall be subject to 
        inspection and examination by any representative of the 
        Commission.
          (3) Compliance with core principles.--
                  (A) In general.--To be registered, and 
                maintain registration, as a security-based swap 
                data repository, the security-based swap data 
                repository shall comply with--
                          (i) the requirements and core 
                        principles described in this 
                        subsection; and
                          (ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation.
                  (B) Reasonable discretion of security-based 
                swap data repository.--Unless otherwise 
                determined by the Commission, by rule or 
                regulation, a security-based swap data 
                repository described in subparagraph (A) shall 
                have reasonable discretion in establishing the 
                manner in which the security-based swap data 
                repository complies with the core principles 
                described in this subsection.
          (4) Standard setting.--
                  (A) Data identification.--
                          (i) In general.--In accordance with 
                        clause (ii), the Commission shall 
                        prescribe standards that specify the 
                        data elements for each security-based 
                        swap that shall be collected and 
                        maintained by each registered security-
                        based swap data repository.
                          (ii) Requirement.--In carrying out 
                        clause (i), the Commission shall 
                        prescribe consistent data element 
                        standards applicable to registered 
                        entities and reporting counterparties.
                  (B) Data collection and maintenance.--The 
                Commission shall prescribe data collection and 
                data maintenance standards for security-based 
                swap data repositories.
                  (C) Comparability.--The standards prescribed 
                by the Commission under this subsection shall 
                be comparable to the data standards imposed by 
                the Commission on clearing agencies in 
                connection with their clearing of security-
                based swaps.
          (5) Duties.--A security-based swap data repository 
        shall--
                  (A) accept data prescribed by the Commission 
                for each security-based swap under subsection 
                (b);
                  (B) confirm with both counterparties to the 
                security-based swap the accuracy of the data 
                that was submitted;
                  (C) maintain the data described in 
                subparagraph (A) in such form, in such manner, 
                and for such period as may be required by the 
                Commission;
                  (D)(i) provide direct electronic access to 
                the Commission (or any designee of the 
                Commission, including another registered 
                entity); and
                  (ii) provide the information described in 
                subparagraph (A) in such form and at such 
                frequency as the Commission may require to 
                comply with the public reporting requirements 
                set forth in subsection (m);
                  (E) at the direction of the Commission, 
                establish automated systems for monitoring, 
                screening, and analyzing security-based swap 
                data;
                  (F) maintain the privacy of any and all 
                security-based swap transaction information 
                that the security-based swap data repository 
                receives from a security-based swap dealer, 
                counterparty, or any other registered entity; 
                and
                  (G) on a confidential basis pursuant to 
                section 24, upon request, and after notifying 
                the Commission of the request, make available 
                security-based swap data obtained by the 
                security-based swap data repository, including 
                individual counterparty trade and position 
                data, to--
                          (i) each appropriate prudential 
                        regulator;
                          (ii) the Financial Stability 
                        Oversight Council;
                          (iii) the Commodity Futures Trading 
                        Commission;
                          (iv) the Department of Justice; and
                          (v) any other person that the 
                        Commission determines to be 
                        appropriate, including--
                                  (I) foreign financial 
                                supervisors (including foreign 
                                futures authorities);
                                  (II) foreign central banks;
                                  (III) foreign ministries; and
                                  (IV) other foreign 
                                authorities.
                  (H) Confidentiality agreement.--Before the 
                security-based swap data repository may share 
                information with any entity described in 
                subparagraph (G), the security-based swap data 
                repository shall receive a written agreement 
                from each entity stating that the entity shall 
                abide by the confidentiality requirements 
                described in section 24 relating to the 
                information on security-based swap transactions 
                that is provided.
          (6) Designation of chief compliance officer.--
                  (A) In general.--Each security-based swap 
                data repository shall designate an individual 
                to serve as a chief compliance officer.
                  (B) Duties.--The chief compliance officer 
                shall--
                          (i) report directly to the board or 
                        to the senior officer of the security-
                        based swap data repository;
                          (ii) review the compliance of the 
                        security-based swap data repository 
                        with respect to the requirements and 
                        core principles described in this 
                        subsection;
                          (iii) in consultation with the board 
                        of the security-based swap data 
                        repository, a body performing a 
                        function similar to the board of the 
                        security-based swap data repository, or 
                        the senior officer of the security-
                        based swap data repository, resolve any 
                        conflicts of interest that may arise;
                          (iv) be responsible for administering 
                        each policy and procedure that is 
                        required to be established pursuant to 
                        this section;
                          (v) ensure compliance with this title 
                        (including regulations) relating to 
                        agreements, contracts, or transactions, 
                        including each rule prescribed by the 
                        Commission under this section;
                          (vi) establish procedures for the 
                        remediation of noncompliance issues 
                        identified by the chief compliance 
                        officer through any--
                                  (I) compliance office review;
                                  (II) look-back;
                                  (III) internal or external 
                                audit finding;
                                  (IV) self-reported error; or
                                  (V) validated complaint; and
                          (vii) establish and follow 
                        appropriate procedures for the 
                        handling, management response, 
                        remediation, retesting, and closing of 
                        noncompliance issues.
                  (C) Annual reports.--
                          (i) In general.--In accordance with 
                        rules prescribed by the Commission, the 
                        chief compliance officer shall annually 
                        prepare and sign a report that contains 
                        a description of--
                                  (I) the compliance of the 
                                security-based swap data 
                                repository of the chief 
                                compliance officer with respect 
                                to this title (including 
                                regulations); and
                                  (II) each policy and 
                                procedure of the security-based 
                                swap data repository of the 
                                chief compliance officer 
                                (including the code of ethics 
                                and conflict of interest 
                                policies of the security-based 
                                swap data repository).
                          (ii) Requirements.--A compliance 
                        report under clause (i) shall--
                                  (I) accompany each 
                                appropriate financial report of 
                                the security-based swap data 
                                repository that is required to 
                                be furnished to the Commission 
                                pursuant to this section; and
                                  (II) include a certification 
                                that, under penalty of law, the 
                                compliance report is accurate 
                                and complete.
          (7) Core principles applicable to security-based swap 
        data repositories.--
                  (A) Antitrust considerations.--Unless 
                necessary or appropriate to achieve the 
                purposes of this title, the swap data 
                repository shall not--
                          (i) adopt any rule or take any action 
                        that results in any unreasonable 
                        restraint of trade; or
                          (ii) impose any material 
                        anticompetitive burden on the trading, 
                        clearing, or reporting of transactions.
                  (B) Governance arrangements.--Each security-
                based swap data repository shall establish 
                governance arrangements that are transparent--
                          (i) to fulfill public interest 
                        requirements; and
                          (ii) to support the objectives of the 
                        Federal Government, owners, and 
                        participants.
                  (C) Conflicts of interest.--Each security-
                based swap data repository shall--
                          (i) establish and enforce rules to 
                        minimize conflicts of interest in the 
                        decision-making process of the 
                        security-based swap data repository; 
                        and
                          (ii) establish a process for 
                        resolving any conflicts of interest 
                        described in clause (i).
                  (D) Additional duties developed by 
                commission.--
                          (i) In general.--The Commission may 
                        develop 1 or more additional duties 
                        applicable to security-based swap data 
                        repositories.
                          (ii) Consideration of evolving 
                        standards.--In developing additional 
                        duties under subparagraph (A), the 
                        Commission may take into consideration 
                        any evolving standard of the United 
                        States or the international community.
                          (iii) Additional duties for 
                        commission designees.--The Commission 
                        shall establish additional duties for 
                        any registrant described in section 
                        13(m)(2)(C) in order to minimize 
                        conflicts of interest, protect data, 
                        ensure compliance, and guarantee the 
                        safety and security of the security-
                        based swap data repository.
          (8) Required registration for security-based swap 
        data repositories.--Any person that is required to be 
        registered as a security-based swap data repository 
        under this subsection shall register with the 
        Commission, regardless of whether that person is also 
        licensed under the Commodity Exchange Act as a swap 
        data repository.
          (9) Rules.--The Commission shall adopt rules 
        governing persons that are registered under this 
        subsection.
  (o) Beneficial ownership.--For purposes ofthis section and 
section 16, a person shall be deemed to acquire 
beneficialownership of an equity security based on the purchase 
or sale of asecurity-based swap, only to the extent that the 
Commission, by rule,determines after consultation with the 
prudential regulators and the Secretaryof the Treasury, that 
the purchase or sale of the security-based swap, or classof 
security-based swap, provides incidents of ownership comparable 
to directownership of the equity security, and that it is 
necessary to achieve thepurposes of this section that the 
purchase or sale of the security-based swaps,or class of 
security-based swap, be deemed the acquisition of 
beneficialownership of the equitysecurity.
  (p) Disclosures Relating to Conflict Minerals Originating in 
the Democratic Republic of the Congo.--
          (1) Regulations.--
                  (A) In general.--Not later than 270 days 
                after the date of the enactment of this 
                subsection, the Commission shall promulgate 
                regulations requiring any person described in 
                paragraph (2) to disclose annually, beginning 
                with the person's first full fiscal year that 
                begins after the date of promulgation of such 
                regulations, whether conflict minerals that are 
                necessary as described in paragraph (2)(B), in 
                the year for which such reporting is required, 
                did originate in the Democratic Republic of the 
                Congo or an adjoining country and, in cases in 
                which such conflict minerals did originate in 
                any such country, submit to the Commission a 
                report that includes, with respect to the 
                period covered by the report--
                          (i) a description of the measures 
                        taken by the person to exercise due 
                        diligence on the source and chain of 
                        custody of such minerals, which 
                        measures shall include an independent 
                        private sector audit of such report 
                        submitted through the Commission that 
                        is conducted in accordance with 
                        standards established by the 
                        Comptroller General of the United 
                        States, in accordance with rules 
                        promulgated by the Commission, in 
                        consultation with the Secretary of 
                        State; and
                          (ii) a description of the products 
                        manufactured or contracted to be 
                        manufactured that are not DRC conflict 
                        free (``DRC conflict free'' is defined 
                        to mean the products that do not 
                        contain minerals that directly or 
                        indirectly finance or benefit armed 
                        groups in the Democratic Republic of 
                        the Congo or an adjoining country), the 
                        entity that conducted the independent 
                        private sector audit in accordance with 
                        clause (i), the facilities used to 
                        process the conflict minerals, the 
                        country of origin of the conflict 
                        minerals, and the efforts to determine 
                        the mine or location of origin with the 
                        greatest possible specificity.
                  (B) Certification.--The person submitting a 
                report under subparagraph (A) shall certify the 
                audit described in clause (i) of such 
                subparagraph that is included in such report. 
                Such a certified audit shall constitute a 
                critical component of due diligence in 
                establishing the source and chain of custody of 
                such minerals.
                  (C) Unreliable determination.--If a report 
                required to be submitted by a person under 
                subparagraph (A) relies on a determination of 
                an independent private sector audit, as 
                described under subparagraph (A)(i), or other 
                due diligence processes previously determined 
                by the Commission to be unreliable, the report 
                shall not satisfy the requirements of the 
                regulations promulgated under subparagraph 
                (A)(i).
                  (D) DRC conflict free.--For purposes of this 
                paragraph, a product may be labeled as ``DRC 
                conflict free'' if the product does not contain 
                conflict minerals that directly or indirectly 
                finance or benefit armed groups in the 
                Democratic Republic of the Congo or an 
                adjoining country.
                  (E) Information available to the public.--
                Each person described under paragraph (2) shall 
                make available to the public on the Internet 
                website of such person the information 
                disclosed by such person under subparagraph 
                (A).
          (2) Person described.--A person is described in this 
        paragraph if--
                  (A) the person is required to file reports 
                with the Commission pursuant to paragraph 
                (1)(A); and
                  (B) conflict minerals are necessary to the 
                functionality or production of a product 
                manufactured by such person.
          (3) Revisions and waivers.--The Commission shall 
        revise or temporarily waive the requirements described 
        in paragraph (1) if the President transmits to the 
        Commission a determination that--
                  (A) such revision or waiver is in the 
                national security interest of the United States 
                and the President includes the reasons 
                therefor; and
                  (B) establishes a date, not later than 2 
                years after the initial publication of such 
                exemption, on which such exemption shall 
                expire.
          (4) Termination of disclosure requirements.--The 
        requirements of paragraph (1) shall terminate on the 
        date on which the President determines and certifies to 
        the appropriate congressional committees, but in no 
        case earlier than the date that is one day after the 
        end of the 5-year period beginning on the date of the 
        enactment of this subsection, that no armed groups 
        continue to be directly involved and benefitting from 
        commercial activity involving conflict minerals.
          (5) Definitions.--For purposes of this subsection, 
        the terms ``adjoining country'', ``appropriate 
        congressional committees'', ``armed group'', and 
        ``conflict mineral'' have the meaning given those terms 
        under section 1502 of the Dodd-Frank Wall Street Reform 
        and Consumer Protection Act.
  (q) Disclosure of Payments by Resource Extraction Issuers.--
          (1) Definitions.--In this subsection--
                  (A) the term ``commercial development of oil, 
                natural gas, or minerals'' includes 
                exploration, extraction, processing, export, 
                and other significant actions relating to oil, 
                natural gas, or minerals, or the acquisition of 
                a license for any such activity, as determined 
                by the Commission;
                  (B) the term ``foreign government'' means a 
                foreign government, a department, agency, or 
                instrumentality of a foreign government, or a 
                company owned by a foreign government, as 
                determined by the Commission;
                  (C) the term ``payment''--
                          (i) means a payment that is--
                                  (I) made to further the 
                                commercial development of oil, 
                                natural gas, or minerals; and
                                  (II) not de minimis; and
                          (ii) includes taxes, royalties, fees 
                        (including license fees), production 
                        entitlements, bonuses, and other 
                        material benefits, that the Commission, 
                        consistent with the guidelines of the 
                        Extractive Industries Transparency 
                        Initiative (to the extent practicable), 
                        determines are part of the commonly 
                        recognized revenue stream for the 
                        commercial development of oil, natural 
                        gas, or minerals;
                  (D) the term ``resource extraction issuer'' 
                means an issuer that--
                          (i) is required to file an annual 
                        report with the Commission; and
                          (ii) engages in the commercial 
                        development of oil, natural gas, or 
                        minerals;
                  (E) the term ``interactive data format'' 
                means an electronic data format in which pieces 
                of information are identified using an 
                interactive data standard; and
                  (F) the term ``interactive data standard'' 
                means standardized list of electronic tags that 
                mark information included in the annual report 
                of a resource extraction issuer.
          (2) Disclosure.--
                  (A) Information required.--Not later than 270 
                days after the date of enactment of the Dodd-
                Frank Wall Street Reform and Consumer 
                Protection Act, the Commission shall issue 
                final rules that require each resource 
                extraction issuer to include in an annual 
                report of the resource extraction issuer 
                information relating to any payment made by the 
                resource extraction issuer, a subsidiary of the 
                resource extraction issuer, or an entity under 
                the control of the resource extraction issuer 
                to a foreign government or the Federal 
                Government for the purpose of the commercial 
                development of oil, natural gas, or minerals, 
                including--
                          (i) the type and total amount of such 
                        payments made for each project of the 
                        resource extraction issuer relating to 
                        the commercial development of oil, 
                        natural gas, or minerals; and
                          (ii) the type and total amount of 
                        such payments made to each government.
                  (B) Consultation in rulemaking.--In issuing 
                rules under subparagraph (A), the Commission 
                may consult with any agency or entity that the 
                Commission determines is relevant.
                  (C) Interactive data format.--The rules 
                issued under subparagraph (A) shall require 
                that the information included in the annual 
                report of a resource extraction issuer be 
                submitted in an interactive data format.
                  (D) Interactive data standard.--
                          (i) In general.--The rules issued 
                        under subparagraph (A) shall establish 
                        an interactive data standard for the 
                        information included in the annual 
                        report of a resource extraction issuer.
                          (ii) Electronic tags.--The 
                        interactive data standard shall include 
                        electronic tags that identify, for any 
                        payments made by a resource extraction 
                        issuer to a foreign government or the 
                        Federal Government--
                                  (I) the total amounts of the 
                                payments, by category;
                                  (II) the currency used to 
                                make the payments;
                                  (III) the financial period in 
                                which the payments were made;
                                  (IV) the business segment of 
                                the resource extraction issuer 
                                that made the payments;
                                  (V) the government that 
                                received the payments, and the 
                                country in which the government 
                                is located;
                                  (VI) the project of the 
                                resource extraction issuer to 
                                which the payments relate; and
                                  (VII) such other information 
                                as the Commission may determine 
                                is necessary or appropriate in 
                                the public interest or for the 
                                protection of investors.
                  (E) International transparency efforts.--To 
                the extent practicable, the rules issued under 
                subparagraph (A) shall support the commitment 
                of the Federal Government to international 
                transparency promotion efforts relating to the 
                commercial development of oil, natural gas, or 
                minerals.
                  (F) Effective date.--With respect to each 
                resource extraction issuer, the final rules 
                issued under subparagraph (A) shall take effect 
                on the date on which the resource extraction 
                issuer is required to submit an annual report 
                relating to the fiscal year of the resource 
                extraction issuer that ends not earlier than 1 
                year after the date on which the Commission 
                issues final rules under subparagraph (A).
          (3) Public availability of information.--
                  (A) In general.--To the extent practicable, 
                the Commission shall make available online, to 
                the public, a compilation of the information 
                required to be submitted under the rules issued 
                under paragraph (2)(A).
                  (B) Other information.--Nothing in this 
                paragraph shall require the Commission to make 
                available online information other than the 
                information required to be submitted under the 
                rules issued under paragraph (2)(A).
          (4) Authorization of appropriations.--There are 
        authorized to be appropriated to the Commission such 
        sums as may be necessary to carry out this subsection.
  (r) Disclosure of Certain Activities Relating to Iran.--
          (1) In general.--Each issuer required to file an 
        annual or quarterly report under subsection (a) shall 
        disclose in that report the information required by 
        paragraph (2) if, during the period covered by the 
        report, the issuer or any affiliate of the issuer--
                  (A) knowingly engaged in an activity 
                described in subsection (a) or (b) of section 5 
                of the Iran Sanctions Act of 1996 (Public Law 
                104-172; 50 U.S.C. 1701 note);
                  (B) knowingly engaged in an activity 
                described in subsection (c)(2) of section 104 
                of the Comprehensive Iran Sanctions, 
                Accountability, and Divestment Act of 2010 (22 
                U.S.C. 8513) or a transaction described in 
                subsection (d)(1) of that section;
                  (C) knowingly engaged in an activity 
                described in section 105A(b)(2) of that Act; or
                  (D) knowingly conducted any transaction or 
                dealing with--
                          (i) any person the property and 
                        interests in property of which are 
                        blocked pursuant to Executive Order No. 
                        13224 (66 Fed. Reg. 49079; relating to 
                        blocking property and prohibiting 
                        transactions with persons who commit, 
                        threaten to commit, or support 
                        terrorism);
                          (ii) any person the property and 
                        interests in property of which are 
                        blocked pursuant to Executive Order No. 
                        13382 (70 Fed. Reg. 38567; relating to 
                        blocking of property of weapons of mass 
                        destruction proliferators and their 
                        supporters); or
                          (iii) any person or entity identified 
                        under section 560.304 of title 31, Code 
                        of Federal Regulations (relating to the 
                        definition of the Government of Iran) 
                        without the specific authorization of a 
                        Federal department or agency.
          (2) Information required.--If an issuer or an 
        affiliate of the issuer has engaged in any activity 
        described in paragraph (1), the issuer shall disclose a 
        detailed description of each such activity, including--
                  (A) the nature and extent of the activity;
                  (B) the gross revenues and net profits, if 
                any, attributable to the activity; and
                  (C) whether the issuer or the affiliate of 
                the issuer (as the case may be) intends to 
                continue the activity.
          (3) Notice of disclosures.--If an issuer reports 
        under paragraph (1) that the issuer or an affiliate of 
        the issuer has knowingly engaged in any activity 
        described in that paragraph, the issuer shall 
        separately file with the Commission, concurrently with 
        the annual or quarterly report under subsection (a), a 
        notice that the disclosure of that activity has been 
        included in that annual or quarterly report that 
        identifies the issuer and contains the information 
        required by paragraph (2).
          (4) Public disclosure of information.--Upon receiving 
        a notice under paragraph (3) that an annual or 
        quarterly report includes a disclosure of an activity 
        described in paragraph (1), the Commission shall 
        promptly--
                  (A) transmit the report to--
                          (i) the President;
                          (ii) the Committee on Foreign Affairs 
                        and the Committee on Financial Services 
                        of the House of Representatives; and
                          (iii) the Committee on Foreign 
                        Relations and the Committee on Banking, 
                        Housing, and Urban Affairs of the 
                        Senate; and
                  (B) make the information provided in the 
                disclosure and the notice available to the 
                public by posting the information on the 
                Internet website of the Commission.
          (5) Investigations.--Upon receiving a report under 
        paragraph (4) that includes a disclosure of an activity 
        described in paragraph (1) (other than an activity 
        described in subparagraph (D)(iii) of that paragraph), 
        the President shall--
                  (A) initiate an investigation into the 
                possible imposition of sanctions under the Iran 
                Sanctions Act of 1996 (Public Law 104-172; 50 
                U.S.C. 1701 note), section 104 or 105A of the 
                Comprehensive Iran Sanctions, Accountability, 
                and Divestment Act of 2010, an Executive order 
                specified in clause (i) or (ii) of paragraph 
                (1)(D), or any other provision of law relating 
                to the imposition of sanctions with respect to 
                Iran, as applicable; and
                  (B) not later than 180 days after initiating 
                such an investigation, make a determination 
                with respect to whether sanctions should be 
                imposed with respect to the issuer or the 
                affiliate of the issuer (as the case may be).
          (6) Sunset.--The provisions of this subsection shall 
        terminate on the date that is 30 days after the date on 
        which the President makes the certification described 
        in section 401(a) of the Comprehensive Iran Sanctions, 
        Accountability, and Divestment Act of 2010 (22 U.S.C. 
        8551(a)).
  (s) Pay Raise Disclosures.--An issuer required to file an 
annual report under this section or section 15(d), that is not 
an emerging growth company, shall include in such report--
          (1) the percentage increase in the median of the 
        annual total compensation of all executive officers (as 
        such term is defined in section 240.3b-7 of title 17, 
        Code of Federal Regulations) of the issuer over the 
        last completed fiscal year;
          (2) the percentage increase in the median of the 
        annual total compensation of all employees of the 
        issuer, excluding executive officers, over the last 
        completed fiscal year;
          (3) the ratio of the percentage described in 
        paragraph (1) to the percentage described in paragraph 
        (2);
          (4) a comparison of the percentage described in 
        paragraph (1) to the percentage change over the same 
        period in the Consumer Price Index for All Urban 
        Consumers published by the Bureau of Labor Statistics 
        of the Department of Labor; and
          (5) a comparison of the percentage described in 
        paragraph (2) to the percentage change over the same 
        period in the Consumer Price Index for All Urban 
        Consumers published by the Bureau of Labor Statistics 
        of the Department of Labor.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    Republicans support providing information that is useful to 
investors in making their investment decisions. However, H.R. 
4242, the Greater Accountability in Pay Act of 2019, does not 
provide any such information.
    H.R. 4242 would require public companies to annually 
disclose the pay raise percentage for its executives and the 
pay raise percentage for its median employee over the past year 
and compare each to the rate of inflation. The bill would also 
require public companies to disclose the ratio between the two 
pay raise percentages. It is unclear what problem the bill is 
trying to solve. It is duplicative of existing mandatory 
compensation disclosures and does nothing to raise employee 
wages. Rather, the bill is another attempt to facilitate the 
naming and shaming of public companies.
    Similar to many regulations the Democrats are proposing 
this Congress, their solution for helping workers and raising 
wages is increased mandatory disclosures. These disclosures 
serve only to raise a company's compliance costs and does 
little to increase employee wages except for the attorneys 
handling such unnecessary paperwork. Moreover, this bill is 
duplicative of the mandatory CEO pay ratio disclosure in 
section 953(b) of the Dodd-Frank Act.\1\ This section requires 
public companies to disclose the median compensation amount of 
the company's workforce and compare that number to the 
company's CEO compensation amount in the form of a ratio under 
the pay ratio mandate.\2\
---------------------------------------------------------------------------
    \1\Public Law No. 111-203, sec. 953(b), 124 Stat. 1376, 1904 
(2010), as amended by Public Law No. 112-106, sec. 102(a)(3), 126 Stat. 
306, 309 (2012). Section 102(a)(3) of the JOBS Act amended Section 
953(b) of the Dodd-Frank Act to provide an exemption for registrants 
that are emerging growth companies as that term is defined in Section 
3(a) of the Exchange Act.
    \2\SEC Adopts Interpretive Guidance on Pay Ratio Rule, U.S. 
Securities and Exchange Commission (Sept. 21, 2017), https://
www.sec.gov/news/press-release/2017-172.
---------------------------------------------------------------------------
    A company's pay ratio is a unique calculation based on that 
company's custom methodology and unique composition and 
structure. It is meaningless as a comparative metric outside of 
a name-and-shame tool. For instance, Facebook reported in its 
2019 proxy statement that CEO Mark Zuckerberg's total 
compensation for 2018 was $22,554,543, but he only received $1 
in salary that year.\3\ Facebook reported that Zuckerberg's 
2018 annual total compensation consisted almost entirely of 
costs related to his personal security and use of private 
aircraft.\4\ Meanwhile, the median of the annual total 
compensation of all Facebook employees (excluding Zuckerberg) 
in 2018 was $228,651.\5\
---------------------------------------------------------------------------
    \3\2019 Facebook proxy statement (April 12, 2019), https://
www.sec.gov/Archives/edgar/data/1326801/000132680119000025/
facebook2019definitiveprox.htm#sC6005339F0C55875B20BBB92D61AC81F.
    \4\Id.
    \5\Id.
---------------------------------------------------------------------------
    Despite Zuckerberg receiving $1 in salary and not 
participating in the company's bonus plan nor receiving any 
equity award, Facebook's reported 2018 CEO pay ratio--the ratio 
of its CEO's annual total compensation to the median of the 
annual total compensation of all other employees--was 99 to 
1.\6\ For the same period, Apple reported that its CEO pay 
ratio was 283 to 1 based on the $15,682,219 in annual total 
compensation of CEO Tim Cook, which included his base salary of 
$3 million, and the $55,426 in annual total compensation of its 
median compensated employee.\7\ The discrepancy between Apple's 
CEO compensation and Facebook's CEO compensation demonstrates 
the ratio is misleading to the point of uselessness for 
everyday investors. While Zuckerberg's salary was $1, his 
compensation listed to satisfy this disclosure requirement was 
derived almost entirely from his travel and security costs and 
not the equity he owned in Facebook. On the other hand, Apple's 
CEO compensation does not include such travel and security 
costs and instead is derived from a significant salary amount.
---------------------------------------------------------------------------
    \6\Id.
    \7\2019 Apple proxy statement (Jan. 8, 2019), https://www.sec.gov/
Archives/edgar/data/320193/000119312519004664/
d667873ddef14a.htm#toc667873_28.
---------------------------------------------------------------------------
    The data on pay raise ratios as required under H.R. 4242 
would be similarly meaningless for comparative analyses and 
everyday investors attempting to evaluate investment choices. 
Just like the existing CEO pay ratio disclosure, the pay raise 
ratio disclosure required by H.R. 4242 would be useful only for 
naming and shaming public companies. The data would be 
misleading to everyday investors as the ratio is not comparable 
among companies due to different operational structures, 
geographic locations, and business strategies. Finally, this 
disclosure under H.R. 4242 would add to a company's compliance 
costs instead of being allocated to other areas in the company, 
such as increasing workers' wages.
    While Committee Democrats claim this bill is designed to 
benefit American workers, the only benefit from H.R. 4242 will 
be to the regulatory lawyers and accountants that companies 
hire in order to comply with yet another mandatory disclosure. 
American jobs are not created nor are wages increased by piling 
on more disclosure requirements for public companies. If 
anything, such misguided policy will likely have the opposite 
effect by adding unnecessary compliance costs that deter 
companies from expanding and going public. Companies that 
decide to go public increase their workforces by forty-five 
percent relative to private companies.\8\ To facilitate job 
creation within public companies, we should be focusing on 
policies that make companies want to expand and go public, not 
onerous policies that saddle them with more burdens and 
incentivize them to stay private.
---------------------------------------------------------------------------
    \8\See Testimony of Scott Kupor, Meeting Before the Investor 
Advisory Comm. of the Securities and Exchange Commission (June 22, 
2017), available at https://www.sec.gov/spotlight/investor-advisory-
committee-2012/kupor-sec-testimony.pdf.
---------------------------------------------------------------------------
    To protect the robust American markets, Committee 
Republicans are committed to ensuring that information sought 
through mandatory disclosures has a legitimate public policy 
purpose and actually allows investors to make well-informed 
investment decisions. H.R. 4242 lacks such purpose, and 
therefore Committee Republicans cannot support the bill.
                                   Bill Huizenga.
                                   David Kustoff.
                                   Tom Emmer.
                                   Scott R. Tipton.
                                   William R. Timmons, IV.
                                   Trey Hollingsworth.
                                   Bryan Steil.
                                   Warren Davidson (OH).
                                   Andy Barr.
                                   Frank D. Lucas.
                                   Alexander X. Mooney (WV).
                                   Steve Stivers.
                                   Patrick T. McHenry.
                                   Blaine Luetkemeyer.
                                   Barry Loudermilk.
                                   Peter T. King (NY).
                                   Ted Budd.
                                   Roger Williams.
                                   J. French Hill (AK).
                                   John W. Rose (TN).
                                   Denver Riggleman.
                                   Anthony Gonzalez (OH).
                                   Lee M. Zeldin.
                                   Ann Wagner.
                                   Bill Posey.
                                   Lance Gooden.

                                  [all]