To impose executive compensation limitations with respect to entities assisted under the Troubled Asset Relief Program.

SA 354. Mr. DODD proposed an amendment to amendment SA 98 proposed by
Mr. Inouye (for himself and Mr. Baucus) to the bill H.R. 1, making
supplemental appropriations for job preservation and creation,
infrastructure investment, energy efficiency and science, assistance to
the unemployed, and State and local fiscal stabilization, for fiscal
year ending September 30, 2009, and for other purposes; which was
ordered to lie on the table; as follows:

At the end of division B, add the following:

TITLE VI--EXECUTIVE COMPENSATION OVERSIGHT

SEC. 6001. DEFINITIONS.

For purposes of this title, the following definitions shall
apply:
(1) Senior executive officer.--The term ``senior executive
officer'' means an individual who is 1 of the top 5 most
highly paid executives of a public company, whose
compensation is required to be disclosed pursuant to the
Securities Exchange Act of 1934, and any regulations issued
thereunder, and non-public company counterparts.
(2) Golden parachute payment.--The term ``golden parachute
payment'' means any payment to a senior executive officer for
departure from a company for any reason, except for payments
for services performed or benefits accrued.
(3) TARP.--The term ``TARP'' means the Troubled Asset
Relief Program established under the Emergency Economic
Stabilization Act of 2008 (Public Law 110-343, 12 U.S.C. 5201
et seq.).
(4) TARP recipient.--The term ``TARP recipient'' means any
entity that has received or will receive financial assistance
under the financial assistance provided under the TARP.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(6) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.

SEC. 6002. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

(a) In General.--During the period in which any obligation
arising from financial assistance provided under the TARP
remains outstanding, each TARP recipient shall be subject
to--
(1) the standards established by the Secretary under this
title; and
(2) the provisions of section 162(m)(5) of the Internal
Revenue Code of 1986, as applicable.
(b) Standards Required.--The Secretary shall require each
TARP recipient to meet appropriate standards for executive
compensation and corporate governance.
(c) Specific Requirements.--The standards established under
subsection (b) shall include--
(1) limits on compensation that exclude incentives for
senior executive officers of the TARP recipient to take
unnecessary and excessive risks that threaten the value of
such recipient during the period that any obligation arising
from TARP assistance is outstanding;
(2) a provision for the recovery by such TARP recipient of
any bonus, retention award, or incentive compensation paid to
a senior executive officer and any of the next 20 most
highly-compensated employees of the TARP recipient based on
statements of earnings, revenues, gains, or other criteria
that are later found to be materially inaccurate;
(3) a prohibition on such TARP recipient making any golden
parachute payment to a senior executive officer or any of the
next 5 most highly-compensated employees of the TARP
recipient during the period that any obligation arising from
TARP assistance is outstanding;
(4) a prohibition on such TARP recipient paying or accruing
any bonus, retention award, or incentive compensation during
the period that the obligation is outstanding to at least the
25 most highly-compensated employees, or such higher number
as the Secretary may determine is in the public interest with
respect to any TARP recipient;
(5) a prohibition on any compensation plan that would
encourage manipulation of the reported earnings of such TARP
recipient to enhance the compensation of any of its
employees; and
(6) a requirement for the establishment of a Board
Compensation Committee that meets the requirements of section
6003.
(d) Certification of Compliance.--The chief executive
officer and chief financial officer (or the equivalents
thereof) of each TARP recipient shall provide a written
certification of compliance by the TARP recipient with the
requirements of this title--
(1) in the case of a TARP recipient, the securities of
which are publicly traded, to the Securities and Exchange
Commission, together with annual filings required under the
securities laws; and

[[Page S1610]]

(2) in the case of a TARP recipient that is not a publicly
traded company, to the Secretary.

SEC. 6003. BOARD COMPENSATION COMMITTEE.

(a) Establishment of Board Required.--Each TARP recipient
shall establish a Board Compensation Committee, comprised
entirely of independent directors, for the purpose of
reviewing employee compensation plans.
(b) Meetings.--The Board Compensation Committee of each
TARP recipient shall meet at least semiannually to discuss
and evaluate employee compensation plans in light of an
assessment of any risk posed to the TARP recipient from such
plans.

SEC. 6004. LIMITATION ON LUXURY EXPENDITURES.

(a) Policy Required.--The board of directors of any TARP
recipient shall have in place a company-wide policy regarding
excessive or luxury expenditures, as identified by the
Secretary, which may include excessive expenditures on--
(1) entertainment or events;
(2) office and facility renovations;
(3) aviation or other transportation services; or
(4) other activities or events that are not reasonable
expenditures for conferences, staff development, reasonable
performance incentives, or other similar measures conducted
in the normal course of the business operations of the TARP
recipient.

SEC. 6005. SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.

(a) Annual Shareholder Approval of Executive
Compensation.--Any proxy or consent or authorization for an
annual or other meeting of the shareholders of any TARP
recipient during the period in which any obligation arising
from financial assistance provided under the TARP remains
outstanding shall permit a separate shareholder vote to
approve the compensation of executives, as disclosed pursuant
to the compensation disclosure rules of the Commission (which
disclosure shall include the compensation discussion and
analysis, the compensation tables, and any related material).
(b) Nonbinding Vote.--A shareholder vote described in
subsection (a) shall not be binding on the board of directors
of a TARP recipient, and may 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 proxy materials related to
executive compensation.
(c) Deadline for Rulemaking.--Not later than 1 year after
the date of enactment of this Act, the Commission shall issue
any final rules and regulations required by this section.

SEC. 6006. REVIEW OF PRIOR PAYMENTS TO EXECUTIVES.

(a) In General.--The Secretary shall review bonuses,
retention awards, and other compensation paid to employees of
each entity receiving TARP assistance before the date of
enactment of this Act to determine whether any such payments
were excessive, inconsistent with the purposes of this Act or
the TARP, or otherwise contrary to the public interest.
(b) Negotiations for Reimbursement.--If the Secretary makes
a determination described in subsection (a), the Secretary
shall seek to negotiate with the TARP recipient and the
subject employee for appropriate reimbursements to the
Federal Government with respect to compensation or bonuses.
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