To amend the executive compensation provisions of the Emergency Economic Stabilization Act of 2008 to prohibit unreasonable and excessive compensation and compensation not based on performance standards.
| Date | Chamber | What was voted on | Result | Yes–No | |
|---|---|---|---|---|---|
| Apr 1, 2009 | House · vote #182 | On Passage | Passed | 247–171 | See who voted → |
(Sec. 1) Amends the Emergency Economic Stabilization Act of 2008 (EESA) to prohibit a financial institution that receives or has received a direct capital investment under the Troubled Asset Relief Program (TARP) (or with respect to the Federal National Mortgage Association [Fannie Mae], the Federal Home Loan Mortgage Corporation [Freddie Mac], or a federal home loan bank, under the Housing and Economic Recovery Act of 2008) from making a compensation payment (other than a longevity bonus or a payment in the form of restricted stock) to an executive or employee under a preexisting compensation arrangement, or from entering into a new compensation payment arrangement, while that capital investment remains outstanding, if such compensation: (1) is unreasonable or excessive according to standards established by the Secretary of the Treasury in consultation with the Chairperson of the Congressional Oversight Panel; or (2) includes any bonus or other supplemental payment, whether payable before employment, during employment, or after termination of employment, that is not directly based upon such standards.
Declares such prohibition inapplicable to an institution that did business with a recipient of a direct capital investment under the TARP, or under amendments made by the Housing and Economic Recovery Act of 2008.
Instructs the Secretary, with the approval of the agencies that are members of the Federal Financial Institutions Examination Council, and in consultation with the Chairperson of the Congressional Oversight Panel, to establish standards governing: (1) unreasonable and excessive compensation; and (2) performance-based measures that a financial institution must apply when determining whether it may provide a bonus or retention payment.
Excludes from the meaning of compensation payment under this Act any severance payment paid upon the employee's dismissal by an employer in the ordinary course of business to an employee who has been employed for a minimum of five years, unless such severance payment is greater than the employee's annual salary or $250,000.
States that the prohibition against certain compensation not based upon performance standards does not apply to a financial institution that has entered into an agreement with the Secretary to repay the United States all outstanding amounts of any direct capital investment or investments it has received under this Act. Declares, however, that if an institution defaults on such an agreement, the Secretary shall require the institution to surrender to the Treasury the compensation payments that would have been subject to such prohibition.
Requires financial institutions subject to this Act to report annually to the Secretary how many officers, directors, and employees received or will receive total compensation over each of five specified thresholds in that fiscal year.
Requires such report to distinguish amounts an institution considers to be a bonus and the reason for such distinction. Authorizes the Secretary to exempt community financial institutions from the requirements of this Act.
Defines total compensation as all cash payments (including without limitation salary, bonus, and retention payments), all transfers of property, stock options, sales of stock, and all contributions by the company (or its affiliates) for a person's benefit or for the benefit of that person's immediate family members.
States that the identity of persons receiving compensation in such amounts shall not be required in such reports.
Directs the Secretary to make such reports available on the Internet.
Requires a financial institution, while subject to this Act, to issue: (1) a retrospective annual report for 2008; and (2) both a prospective and retrospective annual report for each subsequent calendar year.
States that, for a financial institution that has received or receives a direct capital investment under TARP, while such investment remains outstanding, no otherwise prohibited bonus or other supplemental payment may be paid to employees or executives without regard to when the arrangement to pay such a bonus was entered into.
(Sec. 2) Establishes the Commission on Executive Compensation to study and report to the President and Congress on the executive compensation system for recipients of a direct capital investment under the TARP. Requires the report's recommendations for executive action and voluntary recipient actions to be accompanied by any separate minority view recommendations that members of the Commission wish to make, but that were not agreed upon by the Commission for the report.
Authorizes appropriations.
Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 50.