I 

111TH CONGRESS 

1ST SESSION H. R. 851 

To establish executive compensation and corporate governance requirements 

for institutions receiving assistance under the Troubled Assets Relief Program. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 4, 2009 

Ms. GIFFORDS introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To establish executive compensation and corporate governance requirements for institutions receiving assistance 

under the Troubled Assets Relief Program. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Executive Compensa5 tion and Corporate Governance Act of 2009’’. 

6 SEC. 2. EXECUTIVE COMPENSATION AND CORPORATE GOV7 ERNANCE. 

8 (a) IN GENERAL.—Section 111 of the Emergency 

9 Economic Stabilization Act of 2008 (12 U.S.C. 5221) is 


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1 amended by adding at the end the following new sub2 sections: 

3 ‘‘(e) ACROSS-THE-BOARD EXECUTIVE COMPENSA4 TION AND CORPORATE GOVERNANCE REQUIREMENTS.— 

5 ‘‘(1) STANDARDS REQUIRED.—Effective as of 

6 the date of the enactment of the Executive Com7 pensation and Corporate Governance Act of 2009, 

8 and notwithstanding any provision of, and in addi9 tion to any requirement of subsection (a), (b), or (c) 

10 (other than the definitions in subsection (b)(3)), the 

11 Secretary shall require any assisted institution to 

12 meet standards for executive compensation and cor13 porate governance while any assistance under this 

14 title is outstanding. 

15 ‘‘(2) SPECIFIC REQUIREMENTS.—The standards 

16 established under paragraph (1) shall include— 

17 ‘‘(A) limits on compensation that exclude 

18 incentives for senior executive officers of an as19 sisted institution which received assistance 

20 under this title to take unnecessary and exces21 sive risks that threaten the value of such insti22 tution during the period that any assistance 

23 under this title is outstanding; 

24 ‘‘(B) a provision for the recovery by such 

25 institution of any bonus or incentive compensaVerDate Nov 24 2008 04:29 Feb 06, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H851.IH H851

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1 tion paid to a senior executive officer based on 

2 statements of earnings, gains, or other criteria 

3 that are later found to be materially inaccurate; 

4 ‘‘(C) a prohibition on such institution mak5 ing any golden parachute payment to a senior 

6 executive officer during the period that the as7 sistance under this title is outstanding; 

8 ‘‘(D) a prohibition on such institution pay9 ing or accruing any bonus or incentive com10 pensation, during the period that the assistance 

11 under this title is outstanding, to the twenty12 five most highly-compensated employees; and 

13 ‘‘(E) a prohibition on any compensation 

14 plan that would encourage manipulation of such 

15 institution’s reported earnings to enhance the 

16 compensation of any of its employees. 

17 ‘‘(3) DIVESTITURE.—During the period in 

18 which any assistance under this title to any assisted 

19 institution is outstanding, the institution may not 

20 own or lease any private passenger aircraft, or have 

21 any interest in such aircraft, except that such insti22 tution shall not be treated as being in violation of 

23 this provision with respect to any aircraft or interest 

24 in any aircraft that was owned or held by the insti25 tution immediately before receiving such assistance, 


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1 as long as the recipient demonstrates to the satisfac2 tion of the Secretary that all reasonable steps are 

3 being taken to sell or divest such aircraft or interest. 

4 ‘‘(4) APPLICABILITY TO PRIOR ASSISTANCE.— 

5 Notwithstanding any limitations included in sub6 section (a), (b), or (c) with regard to applicability, 

7 the Secretary may apply the requirements of and the 

8 standards established under this subsection to any 

9 assisted institution that received any assistance 

10 under this title on or after the date of the enactment 

11 of the Executive Compensation and Corporate Gov12 ernance Act of 2009. 

13 ‘‘(f) BOARD OBSERVER.—The Secretary may require 

14 the attendance of an observer delegated by the Secretary, 

15 on behalf of the Secretary, to attend the meetings of the 

16 board of directors of any assisted institution that became 

17 an assisted institution on or after October 3, 2008, and 

18 any committees of such board of directors, while any as19 sistance under this title is outstanding.’’. 

20 (b) REPEAL OF DE MINIMIS EXCEPTION.—Section 

21 111(c) of the Emergency Economic Stabilization Act of 

22 2008 (12 U.S.C. 5221(c)) is amended by striking ‘‘and 

23 only where such purchases per financial institution in the 


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1 aggregate exceed $300,000,000 (including direct pur2 chases),’’. 

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