IB 

Union Calendar No. 28 

111TH CONGRESS 

1ST SESSION H. R. 1664 

[Report No. 111–64] 

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 

MARCH 30, 2009 

Additional sponsor: Ms. FUDGE

MARCH 30, 2009 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on March 23, 2009] 

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. 


wwoods2 on PRODPC68 with BILLS
2 

•HR 1664 RH

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 CERTAIN COMPENSATION. 

4 (a) PROHIBITION ON CERTAIN COMPENSATION NOT

5 BASED ON PERFORMANCE STANDARDS.—Section 111 of the 

6 Emergency Economic Stabilization Act of 2008 (12 U.S.C. 

7 5221) is amended by redesignating subsections (e) through 

8 (h) as subsections (f) through (i), and inserting after sub9 section (d) the following: 

10 ‘‘(e) PROHIBITION ON CERTAIN COMPENSATION NOT

11 BASED ON PERFORMANCE STANDARDS.— 

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

13 that has received or receives a direct capital invest14 ment under the Troubled Assets Relief Program under 

15 this title, or with respect to the Federal National 

16 Mortgage Association, the Federal Home Loan Mort17 gage Corporation, or a Federal home loan bank, 

18 under the amendments made by section 1117 of the 

19 Housing and Economic Recovery Act of 2008, may, 

20 while that capital investment remains outstanding, 

21 make a compensation payment, other than a lon22 gevity bonus or a payment in the form of restricted 

23 stock, to any executive or employee under any exist24 ing compensation arrangement, or enter into a new 

25 compensation payment arrangement, if such comVerDate Nov 24 2008 23:37 Mar 30, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6203 E:\BILLS\H1664.RH H1664

wwoods2 on PRODPC68 with BILLS
3 

•HR 1664 RH

1 pensation payment or compensation payment ar2 rangement— 

3 ‘‘(A) provides for compensation that is un4 reasonable or excessive, as defined in standards 

5 established by the Secretary, in consultation with 

6 the Chairperson of the Congressional Oversight 

7 Panel established under section 125, in accord8 ance with paragraph (2); or 

9 ‘‘(B) includes any bonus or other supple10 mental payment that is not directly based on 

11 performance-based measures set forth in stand12 ards established by the Secretary in accordance 

13 with paragraph (2). 

14 Provided that, nothing in this paragraph applies to 

15 an institution that did business with a recipient of a 

16 direct capital investment under the TARP. 

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

18 the date of enactment of this subsection, the Secretary, 

19 with the approval of the agencies that are members of 

20 the Federal Financial Institutions Examination 

21 Council, and in consultation with the Chairperson of 

22 the Congressional Oversight Panel established under 

23 section 125, shall establish the following: 

24 ‘‘(A) UNREASONABLE AND EXCESSIVE COM25 PENSATION STANDARDS.—Standards that define 


wwoods2 on PRODPC68 with BILLS
4 

•HR 1664 RH

1 ‘unreasonable or excessive’ for purposes of sub2 paragraph (1)(A). 

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

4 Standards for performance-based measures that 

5 a financial institution must apply when deter6 mining whether it may provide a bonus or reten7 tion payment under paragraph (1)(B). Such 

8 performance measures shall include— 

9 ‘‘(i) the stability of the financial insti10 tution and its ability to repay or begin re11 paying the United States for any capital 

12 investment received under this title; 

13 ‘‘(ii) the performance of the individual 

14 executive or employee to whom the payment 

15 relates; 

16 ‘‘(iii) adherence by executives and em17 ployees to appropriate risk management re18 quirements; and 

19 ‘‘(iv) other standards which provide 

20 greater accountability to shareholders and 

21 taxpayers. 

22 ‘‘(3) REPORTING REQUIREMENT.— 

23 ‘‘(A) IN GENERAL.—Any financial institu24 tion that is subject to the requirements of para25 graph (1) shall, not later than 90 days after the 


wwoods2 on PRODPC68 with BILLS
5 

•HR 1664 RH

1 date of enactment of this subsection and annu2 ally on March 31 each year thereafter, transmit 

3 to the Secretary, who shall make a report which 

4 states how many persons (officers, directors, and 

5 employees) received or will receive total com6 pensation in that fiscal year in each of the fol7 lowing amounts: 

8 ‘‘(i) over $500,000; 

9 ‘‘(ii) over $1,000,000; 

10 ‘‘(iii) over $2,000,000; 

11 ‘‘(iv) over $3,000,000; and 

12 ‘‘(v) over $5,000,000. 

13 The report shall distinguish amounts the institu14 tion considers to be a bonus and the reason for 

15 such distinction. The name or identity of persons 

16 receiving compensation in such amounts shall 

17 not be required in such reports. The Secretary 

18 shall make such reports available on the Internet. 

19 Any financial institution subject to this para20 graph shall issue a retrospective annual report 

21 for 2008 and both a prospective and retrospective 

22 annual report for each subsequent calendar year 

23 until such institution ceases to be subject to this 

24 paragraph. 


wwoods2 on PRODPC68 with BILLS
6 

•HR 1664 RH

1 ‘‘(B) TOTAL COMPENSATION DEFINED.—For 

2 purposes of this paragraph, the term ‘total com3 pensation’ includes all cash payments (including 

4 without limitation salary, bonus, retention pay5 ments), all transfers of property, stock options, 

6 sales of stock, and all contributions by the com7 pany (or its affiliates) for that person’s benefit.’’. 

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

9 111(b)(3)(D)(iii) of the Emergency Economic Stabilization 

10 Act of 2008 (12 U.S.C. 5221(b)(3)(D)(iii)) is amended by 

11 inserting before the period the following: ‘‘, except that an 

12 entity subject to subsection (e) may not, while a capital in13 vestment described in that subsection remains outstanding, 

14 pay a bonus or other supplemental payment that is other15 wise prohibited by clause (i) without regard to when the 

16 arrangement to pay such a bonus was entered into’’. 


wwoods2 on PRODPC68 with BILLS

wwoods2 on PRODPC68 with BILLS
Union Calendar No. 28 

111TH CONGRESS 

1ST SESSION H. R. 1664 

[Report No. 111–64] 

A BILL 

To amend the executive compensation provisions of 

formance standards. pensation and compensation not based on per2008 to prohibit unreasonable and excessive comthe Emergency Economic Stabilization Act of 

MARCH 30, 2009 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


wwoods2 on PRODPC68 with BILLS