110TH CONGRESS 

1ST SESSION H. R. 1257

AN ACT

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,
2

•HR 1257 EH

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Shareholder Vote on 

3 Executive Compensation Act’’. 

4 SEC. 2. SHAREHOLDER VOTE ON EXECUTIVE COMPENSA5 TION DISCLOSURES. 

6 (a) AMENDMENT.—Section 14 of the Securities Ex7 change Act of 1934 (15 U.S.C. 78n) is amended by adding 

8 at the end the following new subsection: 

9 ‘‘(i) ANNUAL SHAREHOLDER APPROVAL OF EXECU10 TIVE COMPENSATION.—

11 ‘‘(1) ANNUAL VOTE.—Any proxy or consent or 

12 authorization for an annual meeting of the share13 holders (or a special meeting in lieu of the annual 

14 meeting) occurring on or after January 1, 2009, 

15 shall provide for a separate shareholder vote to ap16 prove the compensation of executives as disclosed 

17 pursuant to the Commission’s compensation disclo18 sure rules (which disclosure shall include the com19 pensation discussion and analysis, the compensation 

20 tables, and any related material). The shareholder 

21 vote shall not be binding on the corporation or the 

22 board of directors and shall not be construed as 

23 overruling a decision by such board, nor to create or 

24 imply any additional fiduciary duty by such board, 

25 nor shall such vote be construed to restrict or limit 

26 the ability of shareholders to make proposals for in-
3

•HR 1257 EH

1 clusion in such proxy materials related to executive 

2 compensation. 

3 ‘‘(2) SHAREHOLDER APPROVAL OF GOLDEN

4 PARACHUTE COMPENSATION.—

5 ‘‘(A) DISCLOSURE.—In any proxy solicita6 tion material for an annual meeting of the 

7 shareholders (or a special meeting in lieu of the 

8 annual meeting) occurring on or after January 

9 1, 2009, that concerns an acquisition, merger, 

10 consolidation, or proposed sale or other disposi11 tion of substantially all the assets of an issuer, 

12 the person making such solicitation shall dis13 close in the proxy solicitation material, in a 

14 clear and simple form in accordance with regu15 lations of the Commission, any agreements or 

16 understandings that such person has with any 

17 principal executive officers of such issuer (or of 

18 the acquiring issuer, if such issuer is not the 

19 acquiring issuer) concerning any type of com20 pensation (whether present, deferred, or contin21 gent) that are based on or otherwise relate to 

22 the acquisition, merger, consolidation, sale, or 

23 other disposition, and that have not been sub24 ject to a shareholder vote under paragraph (1). 
4

•HR 1257 EH

1 ‘‘(B) SHAREHOLDER APPROVAL.—The 

2 proxy solicitation material containing the disclo3 sure required by subparagraph (A) shall provide 

4 for a separate shareholder vote to approve such 

5 agreements or understandings. A vote by the 

6 shareholders shall not be binding on the cor7 poration or the board of directors and shall not 

8 be construed as overruling a decision by such 

9 board, nor to create or imply any additional fi10 duciary duty by such board, nor shall such vote 

11 be construed to restrict or limit the ability of 

12 shareholders to make proposals for inclusion in 

13 such proxy materials related to executive com14 pensation.’’. 

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

16 year after the date of the enactment of this Act, the Secu17 rities and Exchange Commission shall issue any final rules 

18 and regulations required by the amendments made by sub19 section (a). 

Passed the House of Representatives April 20, 2007. 

Attest:

Clerk. 

110TH CONGRESS 

1ST SESSION H. R. 1257

AN ACT

To amend the Securities Exchange Act of 1934 to 

ecutive compensation.provide shareholders with an advisory vote on ex-