I 

110TH CONGRESS 

1ST SESSION H. R. 1257 

To amend the Securities Exchange Act of 1934 to provide shareholders 

with an advisory vote on executive compensation. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 1, 2007 

Mr. FRANK of Massachusetts (for himself, Mr. SCOTT of Georgia, Mr. RANGEL, Mr. GEORGE MILLER of California, Ms. VELA ́ZQUEZ, Mr. KANJORSKI, Mr. GUTIERREZ, Mr. DEFAZIO, Mr. CLAY, Mr. BACA, Mr. AL

GREEN of Texas, Mr. COOPER, Ms. WOOLSEY, Mr. SHERMAN, Mr. 

ELLISON, Mr. LANTOS, Mr. ACKERMAN, Mr. MILLER of North Carolina, 

Mr. CLEAVER, Mr. SIRES, Mr. PERLMUTTER, and Mr. WILSON of Ohio) 

introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Securities Exchange Act of 1934 to provide 

shareholders with an advisory vote on executive compensation. 

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 ‘‘Shareholder Vote on 

5 Executive Compensation Act’’. 


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1 SEC. 2. SHAREHOLDER VOTE ON EXECUTIVE COMPENSA2 TION DISCLOSURES. 

3 (a) AMENDMENT.—Section 16 of the Securities Ex4 change Act of 1934 (15 U.S.C. 78n) is amended by adding 

5 at the end the following new subsection: 

6 ‘‘(h) ANNUAL SHAREHOLDER APPROVAL OF EXECU7 TIVE COMPENSATION.— 

8 ‘‘(1) IN GENERAL.—Any proxy or consent or 

9 authorization under this section shall permit a sepa10 rate shareholder vote to approve the compensation of 

11 executives as disclosed pursuant to the Commission’s 

12 compensation disclosure rules (which disclosure shall 

13 include the compensation discussion and analysis, 

14 the compensation tables, and any related material). 

15 The shareholder vote shall not be binding on the 

16 board of directors and shall not be construed as 

17 overruling a decision by such board. 

18 ‘‘(2) SHAREHOLDER APPROVAL OF GOLDEN

19 PARACHUTE COMPENSATION.— 

20 ‘‘(A) DISCLOSURE.—In any proxy solicita21 tion material that concerns an acquisition, 

22 merger, consolidation, or proposed sale or other 

23 disposition of substantially all the assets of an 

24 issuer, the person making such solicitation shall 

25 disclose in the proxy solicitation material, in a 

26 clear and simple form in accordance with reguVerDate Aug 31 2005 17:40 Mar 03, 2007 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1257.IH H1257

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1 lations of the Commission, any agreements or 

2 understandings that such person has with any 

3 principal executive officers of such issuer (or of 

4 the acquiring issuer, if such issuer is not the 

5 acquiring issuer) concerning any type of com6 pensation (whether present, deferred, or contin7 gent) that are based on or otherwise relate to 

8 the acquisition, merger, consolidation, sale, or 

9 other disposition, and that have not been sub10 ject to a shareholder vote under paragraph (1). 

11 ‘‘(B) SHAREHOLDER APPROVAL.—The 

12 proxy solicitation material containing the disclo13 sure required by subparagraph (A) shall require 

14 a separate shareholder vote to approve such 

15 agreements or understandings. A vote by the 

16 shareholders shall not be binding on the board 

17 of directors and shall not be construed as over18 ruling a decision by such board.’’. 

19 (b) DEADLINE FOR RULEMAKING.—Not later than 1 

20 year after the date of the enactment of this Act, the Secu21 rities and Exchange Commission shall issue any final rules 

22 and regulations required by the amendments made by sub23 section (a). 

Æ 


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