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[House Report 112-142]
[From the U.S. Government Publishing Office]

112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    112-142

======================================================================

 
                 BURDENSOME DATA COLLECTION RELIEF ACT

                                _______
                                

 July 12, 2011.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

         Mr. Bachus, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 1062]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 1062) 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

    H.R. 1062, 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 for 
each filing with the Securities and Exchange Commission 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. The legislation 
is needed to alleviate the enormous burden and complexity this 
provision 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 
deliberations on the legislation. 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.
    On September 24, 2010, the Financial Services Committee 
received testimony regarding the difficulty and complexity that 
will confront public companies in meeting these new 
requirements. The Committee learned that public companies could 
be required to calculate the median pay for thousands of 
employees globally, and that compensation data is housed in 
numerous computer systems and may not be sufficiently accurate 
to comply with the disclosure rules. The Committee also heard 
testimony that such disclosures may ultimately yield little 
useful information to investors.
    The Subcommittee on Capital Markets and Government 
Sponsored Enterprises held a legislative hearing on H.R. 1062 
on March 16, 2011. During that hearing, the Subcommittee 
received testimony from Mr. Kenneth Bertsch, among others. Mr. 
Bertsch, who testified on behalf of the Society of Corporate 
Secretaries and Governance Professionals--a professional 
association with more than 3,100 members who support the work 
of boards of directors at more than 2,000 companies--stated:

          ``We believe that it will be virtually impossible for 
        large global companies to comply with Section 953(b) as 
        now written, and that implementation will impose a 
        substantial burden even on smaller non-global issuers. 
        More importantly, while we acknowledge a public policy 
        concern on pay gaps in the United States, we strongly 
        believe the required ratio will not be material or 
        meaningful to investors in company securities. 
        Accordingly, we believe the provision should not be 
        implemented at this time; rather this section should be 
        repealed and, if it is determined to be appropriate, 
        new more workable legislation should be enacted.''

    Because the costs of compliance with Section 953(b) are 
high relative to the benefits to investors from the 
disclosures, if any, Representative Hayworth introduced H.R. 
1062 on March 14, 2011 to repeal Section 953(b) so that 
resources that would have been allocated to complying with this 
requirement can be devoted to more productive economic 
activities.

                                Hearings

    On March 16, 2011, the Subcommittee on Capital Markets and 
Government Sponsored Enterprises held a hearing entitled 
``Legislative Proposals to Promote Job Creation, Capital 
Formation, and Market Certainty,'' to consider H.R. 1062 and 
four other bills. The following witnesses testified:
           Mr. Kenneth A. Bertsch, President and CEO, 
        Society of Corporate Secretaries & Governance 
        Professionals
           Mr. Tom Deutsch, Executive Director, 
        American Securitization Forum
           Ms. Pam Hendrickson, Chief Operating 
        Officer, The Riverside Company
           Mr. Damon Silvers, Policy Director and 
        Special Counsel, AFL-CIO
           Mr. David Weild, Senior Advisor, Grant 
        Thornton, LLP
           Mr. Luke Zubrod, Director, Chatham Financial

                        Committee Consideration

    The Subcommittee on Capital Markets and Government 
Sponsored Enterprises met in open session on May 3 and 4, 2011, 
and ordered H.R. 1062 favorably reported to the full Committee 
by a record vote of 20 yeas and 12 nays (Record vote No. CM-
26).
    The Committee on Financial Services met in open session on 
June 22, 2011 and ordered H.R. 1062 favorably reported to the 
House by a record vote of 33 yeas and 21 nays (Record vote No. 
FC-46).

                            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 June 22, 2011, the Committee on Financial Services met 
in open session and ordered H.R. 1062 favorably reported to the 
House by a record vote of 33 yeas and 21 nays (Record vote No. 
FC-46). The names of Members voting for and against follow:

                                              RECORD VOTE NO. FC-46
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus.....................        X   ........  .........  Mr. Frank (MA)...  ........        X   .........
Mr. Hensarling.................        X   ........  .........  Ms. Waters.......  ........        X   .........
Mr. King (NY)..................  ........  ........  .........  Mrs. Maloney.....  ........        X   .........
Mr. Royce......................        X   ........  .........  Mr. Gutierrez....  ........  ........  .........
Mr. Lucas......................        X   ........  .........  Ms. Velazquez....  ........        X   .........
Mr. Paul.......................  ........  ........  .........  Mr. Watt.........  ........        X   .........
 Mr. Manzullo..................        X   ........  .........  Mr. Ackerman.....  ........        X   .........
 Mr. Jones.....................        X   ........  .........  Mr. Sherman......  ........        X   .........
 Mrs. Biggert..................        X   ........  .........  Mr. Meeks........  ........        X   .........
 Mr. Gary G. Miller (CA).......        X   ........  .........  Mr. Capuano......  ........        X   .........
 Mrs. Capito...................        X   ........  .........  Mr. Hinojosa.....  ........        X   .........
 Mr. Garrett...................        X   ........  .........  Mr. Clay.........  ........        X   .........
 Mr. Neugebauer................        X   ........  .........  Mrs. McCarthy      ........        X   .........
                                                                 (NY).
 Mr. McHenry...................        X   ........  .........  Mr. Baca.........  ........  ........  .........
 Mr. Campbell..................        X   ........  .........  Mr. Lynch........  ........        X   .........
 Mrs. Bachmann.................        X   ........  .........  Mr. Miller (NC)..  ........        X   .........
 Mr. McCotter..................        X   ........  .........  Mr. David Scott          X   ........  .........
                                                                 (GA).
 Mr. McCarthy (CA).............  ........  ........  .........  Mr. Al Green (TX)  ........        X   .........
 Mr. Pearce....................        X   ........  .........  Mr. Cleaver......  ........        X   .........
 Mr. Posey.....................        X   ........  .........  Ms. Moore........  ........        X   .........
 Mr. Fitzpatrick...............        X   ........  .........  Mr. Ellison......  ........        X   .........
 Mr. Westmoreland..............  ........  ........  .........  Mr. Perlmutter...        X   ........  .........
 Mr. Luetkemeyer...............        X   ........  .........  Mr. Donnelly.....  ........        X   .........
 Mr. Huizenga..................        X   ........  .........  Mr. Carson.......  ........        X   .........
 Mr. Duffy.....................        X   ........  .........  Mr. Himes........        X   ........  .........
 Ms. Hayworth..................        X   ........  .........  Mr. Peters.......  ........        X   .........
 Mr. Renacci...................        X   ........  .........  Mr. Carney.......        X   ........  .........
 Mr. Hurt......................        X   ........  .........
 Mr. Dold......................        X   ........  .........
 Mr. Schweikert................        X   ........  .........
 Mr. Grimm.....................        X   ........  .........
 Mr. Canseco...................        X   ........  .........
Mr. Stivers....................  ........  ........  .........
 Mr. Fincher...................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    During the Committee consideration of H.R. 1062, the 
following amendment was considered:
    1. An amendment offered by Mr. Frank, No. 1, to define the 
term ``employee'' for purposes of the median compensation 
computation, to require an annual disclosure, and to limit 
median compensation to cash compensation, was not agreed to by 
a record vote of 25 ayes and 27 nays (Record vote No. FC-45).

                                              RECORD VOTE NO. FC-45
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus.....................  ........        X   .........  Mr. Frank (MA)...        X   ........  .........
Mr. Hensarling.................  ........        X   .........  Ms. Waters.......        X   ........  .........
Mr. King (NY)..................  ........  ........  .........   Mrs. Maloney....        X   ........  .........
Mr. Royce......................  ........        X   .........   Mr. Gutierrez...  ........  ........  .........
Mr. Lucas......................  ........  ........  .........  Ms. Velazquez....        X   ........  .........
Mr. Paul.......................  ........  ........  .........   Mr. Watt........        X   ........  .........
Mr. Manzullo...................  ........        X   .........   Mr. Ackerman....        X   ........  .........
Mr. Jones......................  ........        X   .........   Mr. Sherman.....        X   ........  .........
Mrs. Biggert...................  ........        X   .........   Mr. Meeks.......        X   ........  .........
Mr. Gary G. Miller (CA)........  ........        X   .........   Mr. Capuano.....        X   ........  .........
Mrs. Capito....................  ........        X   .........   Mr. Hinojosa....        X   ........  .........
Mr. Garrett....................  ........        X   .........   Mr. Clay........        X   ........  .........
Mr. Neugebauer.................  ........        X   .........   Mrs. McCarthy           X   ........  .........
                                                                 (NY).
Mr. McHenry....................  ........        X   .........   Mr. Baca........  ........  ........  .........
Mr. Campbell...................  ........        X   .........   Mr. Lynch.......        X   ........  .........
Mrs. Bachmann..................  ........        X   .........   Mr. Miller (NC).        X   ........  .........
Mr. McCotter...................  ........        X   .........   Mr. David Scott         X   ........  .........
                                                                 (GA).
Mr. McCarthy (CA)..............  ........  ........  .........   Mr. Al Green            X   ........  .........
                                                                 (TX).
Mr. Pearce.....................  ........  ........  .........   Mr. Cleaver.....        X   ........  .........
Mr. Posey......................  ........        X   .........   Ms. Moore.......        X   ........  .........
Mr. Fitzpatrick................  ........        X   .........   Mr. Ellison.....        X   ........  .........
Mr. Westmoreland...............  ........  ........  .........   Mr. Perlmutter..        X   ........  .........
Mr. Luetkemeyer................  ........        X   .........  Mr. Donnelly.....        X   ........  .........
Mr. Huizenga...................  ........        X   .........   Mr. Carson......        X   ........  .........
Mr. Duffy......................  ........        X   .........   Mr. Himes.......        X   ........  .........
Ms. Hayworth...................  ........  ........  .........   Mr. Peters......        X   ........  .........
Mr. Renacci....................  ........        X   .........   Mr. Carney......        X   ........  .........
Mr. Hurt.......................  ........        X   .........
Mr. Dold.......................  ........        X   .........
Mr. Schweikert.................  ........        X   .........
Mr. Grimm......................  ........        X   .........
Mr. Canseco....................  ........        X   .........
Mr. Stivers....................  ........  ........  .........
Mr. Fincher....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    The following amendment and motion were also considered by 
the Committee:
    1. An amendment offered by Mr. Ellison, No. 2, to strike 
the text of the bill and insert a new title and a GAO study on 
pay ratios, was not agreed to by voice vote.
    2. A motion offered by Mr. Garrett to move the previous 
question on H.R. 1062 was agreed to by voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held hearings and 
made findings that are reflected in 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 establishes the 
following performance related goals and objectives for this 
legislation:
    The purpose of H.R. 1062, the Burdensome Data Collection 
Relief Act, is to alleviate the enormous burden and complexity 
imposed by 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 for 
each filing with the SEC the median annual total compensation 
of all employees of the company excluding the CEO, disclose the 
annual total compensation of the CEO, and calculate and 
disclose a ratio comparing those two numbers. H.R. 1062 repeals 
this section of the Dodd-Frank Act. Because the costs of 
compliance with Section 953(b) are high in comparison to the 
benefits to investors of the disclosures, if any, the objective 
of H.R. 1062 in repealing Section 953(b) is to allow resources 
that would have been allocated to complying with this 
requirement to be devoted to productive economic activities.

   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:

                                                     June 30, 2011.
Hon. Spencer Bachus,
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. 1062, the 
Burdensome Data Collection Relief Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Dubary Brea 
and Susan Willie.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 1062--Burdensome Data Collection Relief Act

    H.R. 1062 would repeal a requirement that issuers of 
certain securities include information about compensation of 
their employees in disclosures required to be made to the 
Securities and Exchange Commission (SEC). Based on information 
from the SEC, CBO estimates that implementing H.R. 1062 would 
not have a significant impact on spending subject to 
appropriation. Enacting H.R. 1062 would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    H.R. 1062 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act and would not affect the 
budgets of state, local, or tribal governments.
    The CBO staff contacts for this estimate are Dubary Brea 
and Susan Willie. The estimate was approved by Theresa Gullo, 
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. 1062 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    This section provides a short title to the bill by citing 
it as the ``Burdensome Data Collection Relief Act.''

Section 2. Repeal of additional disclosure requirements

    This section repeals Section 953(b) of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (P.L. 111-203), and 
provides that 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) * * *
  [(b) Additional Disclosure Requirements.--
          [(1) In general.--The Commission shall amend section 
        229.402 of title 17, Code of Federal Regulations, to 
        require each issuer 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)--
                  [(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;
                  [(B) the annual total compensation of the 
                chief executive officer (or any equivalent 
                position) of the issuer; and
                  [(C) the ratio of the amount described in 
                subparagraph (A) to the amount described in 
                subparagraph (B).
          [(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.]

           *       *       *       *       *       *       *

                             MINORITY VIEWS

    Section 953(b) of the Wall Street Reform Act provides much-
needed transparency about relative compensation levels, within 
a public company and between a company and its peers. It does 
this by requiring each public company to disclose the ratio of 
the total compensation of its CEO to that of its median-
compensated employee. This information is relevant to 
investors, particularly those concerned about large 
compensation differentials between CEOs and average workers or 
relative compensation levels at industry peers, as well as to 
labor groups and corporate governance reformers. This 
information also is especially relevant because it will inform 
shareholders' annual ``say-on-pay'' votes.
    Some valid concerns have been expressed about the quarterly 
frequency of the reporting requirement, the inclusion of 
domestic and foreign-based employees, and the complicated 
nature of identifying the median-compensated employee if all 
forms of compensation are included. To address these concerns, 
the Democrats offered an amendment that would (1) make the 
disclosure annual instead of quarterly; (2) limit coverage to 
domestic employees; and (3) identify the median-compensated 
employee based on only cash compensation. These three changes 
would have addressed the major concerns expressed about section 
953(b) and thus rendered an outright repeal unnecessary.
    This amendment was offered because Democrats are serious 
about fixing identified problems with section 953(b) while 
preserving the meaningful additional information contained in 
the new disclosure it requires. By rejecting these changes (25-
27) in favor of an outright repeal, the Republicans are 
depriving the public of a meaningful tool by which to assess 
executive compensation practices within an individual firm and 
between a firm and its peers.

                                   Barney Frank.
                                   Emanuel Cleaver.
                                   Gary L. Ackerman.
                                   Keith Ellison.
                                   Carolyn B. Maloney.
                                   Al Green.
                                   Wm. Lacy Clay.
                                   Brad Miller (NC).
                                   Joe Donnelly.
                                   Michael E. Capuano.
                                   Stephen F. Lynch.
                                   Andre Carson.
                                   Luis V. Gutierrez.
                                   Ruben Hinojosa.
                                   Melvin L. Watt.
                                   Gwen Moore.
                                   Maxine Waters.

                                  
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