59–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 114–504 

BURDENSOME DATA COLLECTION RELIEF ACT 

APRIL 19, 2016.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. HENSARLING, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

[To accompany H.R. 414] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 414) to amend the Dodd-Frank Wall Street Reform and 

Consumer Protection Act to repeal certain additional disclosure requirements, and for other purposes, having considered the same, 

report favorably thereon without amendment and recommend that 

the bill do pass. 

PURPOSE AND SUMMARY

Introduced by Representative Huizenga on January 20, 2015, 

H.R. 414, the Burdensome Data Collection Relief Act, repeals Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer 

Protection Act (Public Law 111–203), which requires all publicly 

traded companies to calculate and disclose in their annual proxy 

statements with the Securities and Exchange Commission (SEC) 

the median annual total compensation of all employees of the company excluding the Chief Executive Officer (CEO), disclose the annual total compensation of the CEO, and calculate and disclose a 

ratio comparing those two numbers. H.R. 414 alleviates the enormous burden and complexity Section 953(b) poses to publicly traded companies, with very little, if any, corresponding benefit to investors. 

BACKGROUND AND NEED FOR LEGISLATION

The disclosure requirements imposed by Section 953(b) of the 

Dodd-Frank Act originated in the Senate, and were neither discussed nor debated during the Conference Committee’s deliberaVerDate Sep 11 2014 03:57 Apr 20, 2016 Jkt 059006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\HR504.XXX HR504

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tions on the legislation. The legislative history and the Dodd-Frank 

Act itself are both silent with respect to the purported purpose of 

the pay ratio rule. This silence is not surprising as Congress did 

not hold any hearings on Section 953(b) prior to its inclusion in the 

Dodd-Frank Act. 

Following enactment of Dodd-Frank, both Republican and Democratic Members of Congress began to question the costs of complying with Section 953(b), the utility of the information required 

to be disclosed, and the feasibility of its implementation. Specifically, Section 953(b) requires all publicly traded companies to calculate and disclose in annual filings with the SEC the median annual total compensation of all employees excluding the CEO, disclose the annual total compensation of the CEO, and calculate and 

disclose a ratio comparing those two numbers. 

Proponents of Dodd-Frank’s pay ratio disclosure requirement 

cited statistics suggesting that the ratio of CEO salaries to the pay 

of the average worker at large U.S. firms has increased from 20 to 

1 in 1965 to 300 to 1 today. Critics of the provision pointed out that 

it does little, if anything, to promote the SEC’s investor protection 

mission, and that addressing income inequality is not the SEC’s 

statutory role. 

On August 5, 2015, by a partisan vote of 3–2, the SEC finalized 

the pay ratio rule, with Commissioners Dan Gallagher and Michael 

Piwowar dissenting. In dissenting from the SEC’s initial proposal 

to implement Section 953(b), Commissioner Gallagher noted that 

the proposal ‘‘continues a trend of politically motivated new disclosure requirements that impose unnecessary compliance costs on 

U.S. issuers, reducing their international competitiveness while 

providing no benefits to investors and political benefits to special 

interest groups.’’ Commissioner Gallagher has also described the 

pay ratio rule as ‘‘social policy masquerading as disclosure requirements,’’ which has the effect of encouraging companies to remain 

private. Commissioner Gallagher’s dissent of the final rule appropriately observed that ‘‘addressing perceived income inequality is 

not the province of the securities laws or the Commission.’’ SEC 

Chair Mary Jo White has expressed similar concerns; in an October 

3, 2013 speech about Dodd-Frank entitled ‘‘The Importance of Independence,’’ she noted that several of the Act’s provisions appear 

‘‘more directed at exerting societal pressure on companies to 

change behavior, rather than to disclose financial information that 

primarily informs investment decisions.’’ Commissioner Piwowar’s 

dissent noted that the adoption of the final rule to implement Section 953(b) is, ‘‘nothing more than a sad example of surrendering 

the Commission’s agenda to politically-connected special interests 

and acquiescing to the bullying tactics of their political allies.’’ 

The SEC expended considerable resources to implement Section 

953. In response to an inquiry from Financial Services Committee 

Chairman Hensarling and Representatives Garrett and Huizenga, 

the SEC disclosed on December 11, 2014, that since 2011, SEC 

staff have spent 7,196 hours—at a cost of $1.1 million—writing the 

pay ratio rule, fueling concerns that the entire exercise has been 

a major distraction from the SEC’s mission to protect investors, 

promote fair, orderly, and efficient markets, and facilitate capital 

formation. 


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The SEC estimates the pay ratio compliance costs to be $1.3 bil- lion on an upfront basis, and $526 million on an ongoing annual 

basis. It is difficult to believe that the vague, potential benefits posited by the final rule outweigh the estimated compliance costs, especially considering the rule’s economic analysis, which cites the 

SEC’s ‘‘inability to quantify the benefits.’’ Furthermore, the SEC 

further observed in the final rule that the pay ratio disclosure may 

warrant additional disclosures from a public company as the company seeks to explain other compensation data points. Because the 

costs of complying with Section 953(b) are high relative to the minimal, if any, benefits that investors receive from the disclosures, 

H.R. 414 repeals Section 953(b) to ensure that resources that would 

have been allocated to complying with this provision can be devoted 

to more productive economic activities. 

HEARINGS

Matters relating to Section 953(b) were discussed at a March 24, 

2015 hearing of the Committee on Financial Services entitled ‘‘Examining the SEC’s Agenda, Operations, and FY 2016 Budget Request,’’ at which SEC Chair Mary Jo White testified, and at a July 

28, 2015 Committee hearing entitled ‘‘Dodd-Frank Act Five Years 

Later: Are We Prosperous?’’ 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

September 30, 2015 and ordered H.R. 414 favorably reported to the 

House without amendment by a record vote of 32 yeas and 25 nays 

(record vote No. FC–59). 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. On September 30, 

2015, the Committee on Financial Services met in open session and 

ordered H.R. 414 favorably reported to the House without amendment by a record vote of 32 yeas and 25 nays (record vote No. FC– 

59) 


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COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the findings and recommendations of the Committee based on oversight activities under clause 2(b)(1) of rule X 

of the Rules of the House of Representatives, are incorporated in 

the descriptive portions of this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee states that H.R. 414 will provide 

for the allocation of capital to more productive uses by repealing 

the disclosure requirement imposed by Section 953(b) of the DoddFrank Act, which yields little if any benefit to investors while posing significant compliance costs on publicly traded companies. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATES

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, October 20, 2015. 

Hon. JEB HENSARLING, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 414, the Burdensome 

Data Collection Relief Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susan Willie. 

Sincerely, 

KEITH HALL. 

Enclosure. 


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H.R. 414—Burdensome Data Collection Relief Act 

H.R. 414 would repeal a provision of current law that requires 

a public company to disclose the ratio of the median of the annual 

compensation of its employees (not including the chief executive officer) to the annual compensation of its chief executive officer (or 

equivalent position). The bill also would nullify the rule released by 

the Securities and Exchange Commission (SEC) to implement that 

requirement. 

Based on information from the SEC, CBO expects that nullifying 

the rule would not require any significant action by the agency; 

thus, CBO estimates that implementing H.R. 414 would not have 

a significant effect on the agency’s costs. Under current law, the 

SEC is authorized to collect fees to offset its annual appropriation; 

therefore, assuming appropriation action consistent with that authority, CBO estimates that implementing the bill would have a 

negligible effect on net discretionary spending. Enacting H.R. 414 

would not affect direct spending or revenues; therefore, pay-as-yougo procedures do not apply. 

CBO estimates that enacting H.R. 414 would not increase net direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2026. 

H.R. 414 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

not affect the budgets of state, local, or tribal governments. 

The CBO staff contact for this estimate is Susan Willie. The estimate was approved by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

EARMARK IDENTIFICATION

H.R. 414 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 

DUPLICATION OF FEDERAL PROGRAMS

Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), the 

Committee states that no provision of H.R. 414 establishes or reauthorizes a program of the Federal Government known to be duplicative of another Federal program, a program that was included in 


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any report from the Government Accountability Office to Congress 

pursuant to section 21 of Public Law 111–139, or a program related 

to a program identified in the most recent Catalog of Federal Domestic Assistance. 

DISCLOSURE OF DIRECTED RULEMAKING

Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), the 

Committee states that H.R. 414 does not require any directed 

rulemakings. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This section cites H.R. 414 as the ‘‘Burdensome Data Collection 

Relief Act.’’ 

Section 2. Repeal of Additional Disclosure Requirements 

Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 781 note) is repealed and any regulations issued pursuant to such subsection shall have no force or 

effect. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets and existing law in which no 

change is proposed is shown in roman): 

DODD-FRANK WALL STREET REFORM AND CONSUMER 

PROTECTION ACT 

* * * * * * * 

TITLE IX—INVESTOR PROTECTIONS 

AND IMPROVEMENTS TO THE REGULATION OF SECURITIES 

* * * * * * * 

Subtitle E—Accountability and Executive 

Compensation 

* * * * * * * 

SEC. 953. EXECUTIVE COMPENSATION DISCLOSURES. 

(a) DISCLOSURE OF PAY VERSUS PERFORMANCE.—Section 14 of 

the Securities Exchange Act of 1934 (15 U.S.C. 78n), as amended 

by this title, is amended by adding at the end the following: 

‘‘(i) DISCLOSURE OF PAY VERSUS PERFORMANCE.—The Commission shall, by rule, require each issuer to disclose in any proxy or 

consent solicitation material for an annual meeting of the shareholders of the issuer a clear description of any compensation reVerDate Sep 11 2014 03:57 Apr 20, 2016 Jkt 059006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\HR504.XXX HR504

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quired to be disclosed by the issuer under section 229.402 of title 

17, Code of Federal Regulations (or any successor thereto), including information that shows the relationship between executive compensation actually paid and the financial performance of the issuer, 

taking into account any change in the value of the shares of stock 

and dividends of the issuer and any distributions. The disclosure 

under this subsection may include a graphic representation of the 

information required to be disclosed.’’. 

ø(b) ADDITIONAL DISCLOSURE REQUIREMENTS.— ø(1) IN GENERAL.—The Commission shall amend section 

229.402 of title 17, Code of Federal Regulations, to require 

each issuer, other than an emerging growth company, as that 

term is defined in section 3(a) of the Securities Exchange Act 

of 1934, to disclose in any filing of the issuer described in section 229.10(a) of title 17, Code of Federal Regulations (or any 

successor thereto)— 

ø(A) the median of the annual total compensation of all 

employees of the issuer, except the chief executive officer 

(or any equivalent position) of the issuer; 

ø(B) the annual total compensation of the chief executive 

officer (or any equivalent position) of the issuer; and 

ø(C) the ratio of the amount described in subparagraph 

(A) to the amount described in subparagraph (B). 

ø(2) TOTAL COMPENSATION.—For purposes of this subsection, 

the total compensation of an employee of an issuer shall be determined in accordance with section 229.402(c)(2)(x) of title 17, 

Code of Federal Regulations, as in effect on the day before the 

date of enactment of this Act.¿ 

* * * * * * * 

Æ 


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