I 
109TH CONGRESS 
1ST SESSION H. R. 4291 
To amend the Securities Exchange Act of 1934 to require additional 
disclosure to shareholders of executive compensation. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 10, 2005 
Mr. FRANK of Massachusetts (for himself, Mr. GEORGE MILLER of California, 
Mr. OBEY, Mr. RANGEL, Mr. SABO, and Ms. VELA´ZQUEZ) introduced the 
following bill; which was referred to the Committee on Financial Services 
A BILL 
To amend the Securities Exchange Act of 1934 to require 
additional disclosure to shareholders of executive com-
pensation. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Protection Against Ex-
ecutive Compensation Abuse Act’’.
SEC. 2. ADDITIONAL EXECUTIVE COMPENSATION DISCLO-
SURES. 
(a) AMENDMENT.—Section 16 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78n) is amended by adding 
at the end the following new subsection: 
‘‘(i) ADDITIONAL EXECUTIVE COMPENSATION DIS-
CLOSURES.— 
‘‘(1) COMPENSATION PLAN.— 
‘‘(A) ANNUAL
STATEMENTS
AND
PROXY 
MATERIALS.—Each issuer required to file an 
annual report under section 13(a) shall include 
in such annual report, and in any proxy solici-
tation materials accompanying a proxy solicita-
tion on behalf of the management of the issuer 
in connection with an annual or other meeting 
of the holders of the securities of the issuer, a 
comprehensive statement of such issuer’s com-
pensation plan for the principal executive offi-
cers of the issuer. Such compensation plan shall 
include— 
‘‘(i) any type of compensation (wheth-
er present, deferred, or contingent) paid or 
to be paid to such principal executive offi-
cers, including—
‘‘(I) an estimate of the present 
value of any accrued pension of such 
officers; 
‘‘(II) the estimated market value 
of any other benefits received by such 
officers; and 
‘‘(III) any agreements or under-
standings concerning any type of com-
pensation; 
‘‘(ii) the short- and long-term per-
formance measures that the issuer uses for 
determining the compensation of such 
principal executive officers and whether 
such measures were met by such officers 
during the preceding year; and 
‘‘(iii) the policy of the issuer adopted 
pursuant to the rules promulgated under 
paragraph (3). 
‘‘(B) 
SHAREHOLDER
APPROVAL.—The 
proxy solicitation materials containing the 
statement required by subparagraph (A) shall 
require a separate shareholder vote to approve 
such compensation plan. 
‘‘(2) SHAREHOLDER
APPROVAL
OF
GOLDEN 
PARACHUTE COMPENSATION.—In any proxy solicita-
tion material that concerns an acquisition, merger, 
consolidation, or proposed sale or other disposition 
of substantially all the assets of an issuer— 
‘‘(A) the person making such solicitation 
shall disclose in the proxy solicitation material, 
in a clear and simple form in accordance with 
regulations of the Commission, any agreements 
or understandings that such person has with 
any principal executive officers of such issuer 
(or of the acquiring issuer, if such issuer is not 
the acquiring issuer) concerning any type of 
compensation (whether present, deferred, or 
contingent) that are based on or otherwise re-
late to the acquisition, merger, consolidation, 
sale, or other disposition; and 
‘‘(B) such proxy solicitation material shall 
require a separate shareholder vote to approve 
such agreements or understandings. 
‘‘(3) RETURN OF CERTAIN COMPENSATION.— 
The Commission shall prescribe rules requiring each 
issuer to adopt a policy requiring the reimbursement 
by any principle executive officer to the issuer of any 
compensation received by such officer that is— 
‘‘(A) not provided for in the compensation 
plan required by paragraph (1);
‘‘(B) based on performance by the officer 
that does not meet the job performance meas-
ures identified in such statement; 
‘‘(C) incentive compensation or bonuses re-
ceived by such officer within 18 months before 
any negative material restatement by the issuer; 
or 
‘‘(D) related to fraud or misrepresentation 
on the part of such officer. 
‘‘(4) PRINCIPAL
EXECUTIVE
OFFICER.—For 
purposes of this subsection, the term ‘principal exec-
utive officer’ means— 
‘‘(A) all individuals serving as the chief ex-
ecutive officer of an issuer, or acting in a simi-
lar capacity, during the most recent fiscal year, 
regardless of compensation level; and 
‘‘(B) for an issuer with total assets of— 
‘‘(i) more than $250,000,000 but less 
than $500,000,000, the 2 most highly 
compensated executive officers, other than 
an individual identified under subpara-
graph (A), that were serving as executive 
officers of an issuer at the end of the most 
recent fiscal year; or
‘‘(ii) more than $500,000,000, the 4 
most highly compensated executive officers, 
other than an individual identified under 
subparagraph (A), that were serving as ex-
ecutive officers of an issuer at the end of 
the most recent fiscal year.’’. 
(b) DEADLINE FOR RULEMAKING.—Not later than 1 
year after the date of the enactment of this Act, the Secu-
rities and Exchange Commission shall issue any final rules 
and regulations required by the amendments made by sub-
section (a). 
SEC. 3. CLEAR AND SIMPLE INTERNET DISCLOSURE. 
Section 16(a)(4) of the Securities Exchange Act of 
1934 (15 U.S.C. 78p(a)(4)) is amended— 
(1) in subparagraph (B), by inserting ‘‘, in a 
clear, simple, and readily accessible format,’’ after 
‘‘each such statement’’; and 
(2) in subparagraph (C), by inserting ‘‘, in a 
clear, simple, and readily accessible format,’’ after 
‘‘that statement’’. 
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