II 
Calendar No. 50 
111TH CONGRESS 
1ST SESSION H. R. 1664 
IN THE SENATE OF THE UNITED STATES 
APRIL 2, 2009 
Received 
APRIL 22, 2009 
Read the first time 
APRIL 23, 2009 
Read the second time and placed on the calendar 
AN ACT 
To amend the executive compensation provisions of the 
Emergency Economic Stabilization Act of 2008 to pro-
hibit unreasonable and excessive compensation and com-
pensation not based on performance standards. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. PROHIBITION ON CERTAIN COMPENSATION. 
(a) PROHIBITION ON CERTAIN COMPENSATION NOT 
BASED ON PERFORMANCE STANDARDS.—Section 111 of 
the Emergency Economic Stabilization Act of 2008 (12 
U.S.C. 5221) is amended by redesignating subsections (e) 
VerDate Nov 24 2008 
03:24 Apr 24, 2009
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H1664.PCS
H1664
wwoods2 on PRODPC68 with BILLS
HR 1664 PCS 
through (h) as subsections (f) through (i), and inserting 
after subsection (d) the following: 
‘‘(e) PROHIBITION ON CERTAIN COMPENSATION NOT 
BASED ON PERFORMANCE STANDARDS.— 
‘‘(1) PROHIBITION.—No financial institution 
that has received or receives a direct capital invest-
ment under the Troubled Assets Relief Program 
under this title, or with respect to the Federal Na-
tional Mortgage Association, the Federal Home 
Loan Mortgage Corporation, or a Federal home loan 
bank, under the amendments made by section 1117 
of the Housing and Economic Recovery Act of 2008, 
may, while that capital investment remains out-
standing, make a compensation payment, other than 
a longevity bonus or a payment in the form of re-
stricted stock, to any executive or employee under 
any existing compensation arrangement, or enter 
into a new compensation payment arrangement, if 
such compensation payment or compensation pay-
ment arrangement— 
‘‘(A) provides for compensation that is un-
reasonable or excessive, as defined in standards 
established by the Secretary, in consultation 
with the Chairperson of the Congressional 
VerDate Nov 24 2008 
03:24 Apr 24, 2009
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H1664.PCS
H1664
wwoods2 on PRODPC68 with BILLS
HR 1664 PCS 
Oversight Panel established under section 125, 
in accordance with paragraph (2); or 
‘‘(B) includes any bonus or other supple-
mental payment, whether payable before em-
ployment, during employment, or after termi-
nation of employment, that is not directly based 
on performance-based measures set forth in 
standards established by the Secretary in ac-
cordance with paragraph (2). 
An institution shall not become subject to the re-
quirements of this paragraph as a result of doing 
business with a recipient of a direct capital invest-
ment under the TARP or under the amendments 
made by the Housing and Economic Recovery Act of 
2008. 
‘‘(2) STANDARDS.—Not later than 30 days 
after the date of enactment of this subsection, the 
Secretary, with the approval of the agencies that are 
members of the Federal Financial Institutions Ex-
amination Council, and in consultation with the 
Chairperson of the Congressional Oversight Panel 
established under section 125, shall establish the fol-
lowing: 
‘‘(A) UNREASONABLE
AND
EXCESSIVE 
COMPENSATION
STANDARDS.—Standards that 
VerDate Nov 24 2008 
03:24 Apr 24, 2009
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1664.PCS
H1664
wwoods2 on PRODPC68 with BILLS
HR 1664 PCS 
define ‘unreasonable or excessive’ for purposes 
of subparagraph (1)(A). 
‘‘(B) PERFORMANCE-BASED STANDARDS.— 
Standards for performance-based measures that 
a financial institution must apply when deter-
mining whether it may provide a bonus or re-
tention payment under paragraph (1)(B). Such 
performance measures shall include— 
‘‘(i) the stability of the financial insti-
tution and its ability to repay or begin re-
paying the United States for any capital 
investment received under this title; 
‘‘(ii) the performance of the individual 
executive or employee to whom the pay-
ment relates; 
‘‘(iii) adherence by executives and em-
ployees to appropriate risk management 
requirements; and 
‘‘(iv) other standards which provide 
greater accountability to shareholders and 
taxpayers. 
‘‘(3) CLARIFICATION RELATING TO SEVERANCE 
PAY.—For purposes of this subsection, a compensa-
tion payment or compensation payment arrangement 
shall not include a severance payment paid by an 
VerDate Nov 24 2008 
03:24 Apr 24, 2009
Jkt 079200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1664.PCS
H1664
wwoods2 on PRODPC68 with BILLS
HR 1664 PCS 
employer in the ordinary course of business to an 
employee who has been employed by the employer 
for a minimum of 5 years upon dismissal of that em-
ployee, unless such severance payment is in an 
amount greater than the annual salary of such em-
ployee or $250,000. 
‘‘(4) CONDITIONAL EXEMPTION.— 
‘‘(A) 
REPAYMENT
AGREEMENT.—Para-
graph (1) shall not apply to a financial institu-
tion that has entered into a comprehensive 
agreement with the Secretary to repay the 
United States, in accordance with a schedule 
and terms established by the Secretary, all out-
standing amounts of any direct capital invest-
ment or investments received by such institu-
tion under this title. 
‘‘(B) DEFAULT.—If the Secretary deter-
mines that an institution that has entered into 
an agreement as provided for in subparagraph 
(A) has defaulted on such agreement, the Sec-
retary shall require that any compensation pay-
ments made by such institution that would have 
been subject to paragraph (1) if the institution 
had not entered into such an agreement be sur-
rendered to the Treasury. 
VerDate Nov 24 2008 
03:24 Apr 24, 2009
Jkt 079200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H1664.PCS
H1664
wwoods2 on PRODPC68 with BILLS
HR 1664 PCS 
‘‘(5) REPORTING REQUIREMENT.— 
‘‘(A) IN GENERAL.—Any financial institu-
tion that is subject to the requirements of para-
graph (1) shall, not later than 90 days after the 
date of enactment of this subsection and annu-
ally on March 31 each year thereafter, transmit 
to the Secretary, who shall make a report which 
states how many persons (officers, directors, 
and employees) received or will receive total 
compensation in that fiscal year in each of the 
following amounts: 
‘‘(i) over $500,000; 
‘‘(ii) over $1,000,000; 
‘‘(iii) over $2,000,000; 
‘‘(iv) over $3,000,000; and 
‘‘(v) over $5,000,000. 
The report shall distinguish amounts the insti-
tution considers to be a bonus and the reason 
for such distinction. The name or identity of 
persons 
receiving 
compensation 
in 
such 
amounts shall not be required in such reports. 
The Secretary shall make such reports available 
on the Internet. Any financial institution sub-
ject to this paragraph shall issue a retrospective 
annual report for 2008 and both a prospective 
VerDate Nov 24 2008 
03:24 Apr 24, 2009
Jkt 079200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H1664.PCS
H1664
wwoods2 on PRODPC68 with BILLS
HR 1664 PCS 
and retrospective annual report for each subse-
quent calendar year until such institution 
ceases to be subject to this paragraph. 
‘‘(B) TOTAL COMPENSATION DEFINED.— 
For purposes of this paragraph, the term ‘total 
compensation’ includes all cash payments (in-
cluding without limitation salary, bonus, reten-
tion payments), all transfers of property, stock 
options, sales of stock, and all contributions by 
the company (or its affiliates) for that person’s 
benefit or for the benefit of that person’s imme-
diate family members. 
‘‘(6) COMMUNITY FINANCIAL INSTITUTION EX-
EMPTION.— 
‘‘(A) IN
GENERAL.—The Secretary may 
exempt community financial institutions from 
any of the requirements of this subsection, 
when the Secretary finds that such an exemp-
tion is consistent with the purposes of this sub-
section. 
‘‘(B) COMMUNITY FINANCIAL INSTITUTION 
DEFINED.—For the purposes of this paragraph, 
the term ‘community financial institution’ 
means a financial institution that receives or re-
ceived a direct capital investment under the 
VerDate Nov 24 2008 
03:24 Apr 24, 2009
Jkt 079200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H1664.PCS
H1664
wwoods2 on PRODPC68 with BILLS
HR 1664 PCS 
Troubled Asset Relief Program under this title 
of not more than $250,000,000. 
‘‘(7) COMPENSATION CONSIDERATIONS UNDER 
THE STANDARDS.—In establishing standards under 
this subsection, the Secretary shall consider as com-
pensation any transfer of property, payment of 
money, or provision of services by the financial insti-
tution that causes any increase in wealth on the part 
of an executive or employee.’’. 
(b) REVISION TO RULE OF CONSTRUCTION.—Section 
111(b)(3)(D)(iii) of the Emergency Economic Stabiliza-
tion Act of 2008 (12 U.S.C. 5221(b)(3)(D)(iii)) is amend-
ed by inserting before the period the following: ‘‘, except 
that an entity subject to subsection (e) may not, while a 
capital investment described in that subsection remains 
outstanding, pay a bonus or other supplemental payment 
that is otherwise prohibited by clause (i) without regard 
to when the arrangement to pay such a bonus was entered 
into’’. 
SEC. 2. EXECUTIVE COMPENSATION COMMISSION. 
Section 111 of the Emergency Economic Stabilization 
Act of 2008 (12 U.S.C. 5221), as amended by section 1, 
is further amended by adding at the end the following new 
subsection: 
‘‘(j) EXECUTIVE COMPENSATION COMMISSION.— 
VerDate Nov 24 2008 
03:24 Apr 24, 2009
Jkt 079200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H1664.PCS
H1664
wwoods2 on PRODPC68 with BILLS