I 

111TH CONGRESS 

1ST SESSION H. R. 1664 

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. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 23, 2009 

Mr. GRAYSON (for himself, Mr. HIMES, Ms. LEE of California, Mr. WELCH, 

Mr. ELLISON, Mr. ORTIZ, Mr. PERRIELLO, Ms. JACKSON-LEE of Texas, 

and Mr. CONNOLLY of Virginia) introduced the following bill; which was 

referred to the Committee on Financial Services 

A BILL 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. PROHIBITION ON EXECUTIVE COMPENSATION 

4 NOT BASED ON PERFORMANCE STANDARDS. 

5 (a) PROHIBITION ON EXECUTIVE COMPENSATION

6 NOT BASED ON PERFORMANCE STANDARDS.—Section 

7 111 of the Emergency Economic Stabilization Act of 2008 


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1 (12 U.S.C. 5221) is amended by redesignating subsections 

2 (e) through (h) as subsections (f) through (g), and insert3 ing after subsection (d) the following: 

4 ‘‘(e) PROHIBITION ON EXECUTIVE COMPENSATION

5 NOT BASED ON PERFORMANCE STANDARDS.— 

6 ‘‘(1) PROHIBITION.—No financial institution 

7 that has received or receives a capital investment 

8 under this title, or with respect to the Federal Na9 tional Mortgage Association, the Federal Home 

10 Loan Montage Corporation, or a Federal home loan 

11 bank, under the amendments made by section 1117 

12 of the Housing and Economic Recovery Act of 2008, 

13 may, while that capital investment remains out14 standing, make a compensation payment to any ex15 ecutive or employee under any pre-existing com16 pensation arrangement, or enter into a new com17 pensation payment arrangement, if such compensa18 tion payment or compensation payment arrange19 ment— 

20 ‘‘(A) provides for compensation that is un21 reasonable or excessive, as defined in standards 

22 established by the Secretary in accordance with 

23 paragraph (2); or 

24 ‘‘(B) includes any bonus, retention pay25 ment, or other supplemental payment that is 


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1 not directly based on performance-based meas2 ures set forth in standards established by the 

3 Secretary in accordance with paragraph (2). 

4 ‘‘(2) STANDARDS.—Not later than 30 days 

5 after the date of enactment of this subsection, the 

6 Secretary shall establish the following: 

7 ‘‘(A) UNREASONABLE AND EXCESSIVE

8 COMPENSATION STANDARDS.—Standards that 

9 define ‘unreasonable or excessive’ for purposes 

10 of subparagraph (1)(A). 

11 ‘‘(B) PERFORMANCE-BASED STANDARDS.— 

12 Standards for performance-based measures that 

13 a financial institution must apply when deter14 mining whether it may provide a bonus or re15 tention payment under paragraph (1)(B). Such 

16 performance measures shall include— 

17 ‘‘(i) the stability of the financial insti18 tution and its ability to repay or begin re19 paying the United States for any capital 

20 investment received under this title; 

21 ‘‘(ii) the performance of the individual 

22 executive or employee to whom the pay23 ment relates; 


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1 ‘‘(iii) adherence by executives and em2 ployees to appropriate risk management 

3 requirements; and 

4 ‘‘(iv) other standards which provide 

5 greater accountability to shareholders and 

6 taxpayers.’’. 

7 (b) REVISION TO RULE OF CONSTRUCTION.—Section 

8 111(b)(3)(D)(iii) of the Emergency Economic Stabiliza9 tion Act of 2008 (12 U.S.C. 5221(b)(3)(D)(iii)) is amend10 ed by inserting before the period the following: ‘‘, except 

11 that no entity subject to subsection (e) may pay a bonus 

12 to any of its employees or executives, without regard to 

13 when the arrangement to pay such a bonus was entered 

14 into.’’. 

Æ 


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