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HR 1257 EHRFS
110th CONGRESS
1st Session
H. R. 1257
IN THE SENATE OF THE UNITED STATES
April 23, 2007
Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs
AN ACT
To amend the Securities Exchange Act of 1934 to provide shareholders with an advisory vote on executive compensation.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
SEC. 2. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION DISCLOSURES.
(a) Amendment- Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n) is amended by adding at the end the following new subsection:
`(i) Annual Shareholder Approval of Executive Compensation-
`(1) ANNUAL VOTE- Any proxy or consent or authorization for an annual meeting of the shareholders (or a special meeting in lieu of the annual meeting) occurring on or after January 1, 2009, shall provide for a separate shareholder vote to approve the compensation of executives as disclosed pursuant to the Commission's compensation disclosure rules (which disclosure shall include the compensation discussion and analysis, the compensation tables, and any related material). The shareholder vote shall not be binding on the corporation or the board of directors and shall not be construed as overruling a decision by such board, nor to create or imply any additional fiduciary duty by such board, nor shall such vote be construed to restrict or limit the ability of shareholders to make proposals for inclusion in such proxy materials related to executive compensation.
`(2) SHAREHOLDER APPROVAL OF GOLDEN PARACHUTE COMPENSATION-
`(A) DISCLOSURE- In any proxy solicitation material for an annual meeting of the shareholders (or a special meeting in lieu of the annual meeting) occurring on or after January 1, 2009, that concerns an acquisition, merger, consolidation, or proposed sale or other disposition of substantially all the assets of an issuer, the person making such solicitation shall disclose in the proxy solicitation material, in a clear and simple form in accordance with regulations of the Commission, any agreements or understandings that such person has with any principal executive officers of such issuer (or of the acquiring issuer, if such issuer is not the acquiring issuer) concerning any type of compensation (whether present, deferred, or contingent) that are based on or otherwise relate to the acquisition, merger, consolidation, sale, or other disposition, and that have not been subject to a shareholder vote under paragraph (1).
`(B) SHAREHOLDER APPROVAL- The proxy solicitation material containing the disclosure required by subparagraph (A) shall provide for a separate shareholder vote to approve such agreements or understandings. A vote by the shareholders shall not be binding on the corporation or the board of directors and shall not be construed as overruling a decision by such board, nor to create or imply any additional fiduciary duty by such board, nor shall such vote be construed to restrict or limit the ability of shareholders to make proposals for inclusion in such proxy materials related to executive compensation.'.
(b) Deadline for Rulemaking- Not later than 1 year after the date of the enactment of this Act, the Securities and Exchange Commission shall issue any final rules and regulations required by the amendments made by subsection (a).
Passed the House of Representatives April 20, 2007.
Attest:
Clerk.110th CONGRESS1st SessionH. R. 1257AN ACTTo amend the Securities Exchange Act of 1934 to provide shareholders with an advisory vote on executive compensation
LORRAINE C. MILLER,
Clerk.
U.S. Congress - Text of H.R.1257 as Referred in Senate Shareholder Vote on Executive Compensation Act
