Stop Subsidizing Multimillion Dollar Corporate Bonuses Act
Bill: H.R.697 | Sponsor: Rep. Doggett, Lloyd (D-TX)
Policy area: Taxation

Summary:
Stop Subsidizing Multimillion Dollar Corporate Bonuses Act
This bill extends the $1 million limit on the deductibility of executive compensation to all employees of publicly traded corporations.

To amend the Internal Revenue Code of 1986 to expand the denial of 
 deduction for certain excessive employee remuneration, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stop Subsidizing Multimillion Dollar 
Corporate Bonuses Act''.

SEC. 2. EXPANSION OF DENIAL OF DEDUCTION FOR CERTAIN EXCESSIVE EMPLOYEE 
              REMUNERATION.

    (a) In General.--
            (1) Expansion.--Section 162(m) of the Internal Revenue Code 
        of 1986 is amended--
                    (A) by striking ``applicable employee 
                remuneration'' each place it appears in paragraphs (1), 
                (4), and (5)(E) and inserting ``applicable 
                remuneration'',
                    (B) by striking ``covered employee'' each place it 
                appears in paragraphs (1) and (4) and inserting 
                ``covered individual'', and
                    (C) by striking ``employee'' each place it appears 
                in paragraph (1) and subparagraphs (A), (C)(ii), and 
                (E) of paragraph (4) and inserting ``individual''.
            (2) Covered individual.--Paragraph (3) of section 162(m) of 
        such Code is amended to read as follows:
            ``(3) Covered individual.--For purposes of this subsection, 
        the term `covered individual' means--
                    ``(A) any individual who performs services 
                (directly or indirectly) for the taxpayer (or any 
                predecessor) for any taxable year beginning after 
                December 31, 2020, or
                    ``(B) any employee--
                            ``(i) who was the principal executive 
                        officer or principal financial officer of the 
                        taxpayer (or any predecessor) at any time 
                        during any preceding taxable year beginning 
                        after December 31, 2016, and before January 1, 
                        2021, or who was an individual acting in such a 
                        capacity, or
                            ``(ii) the total compensation of whom for 
                        any taxable year described in clause (i) was 
                        required to be reported to shareholders under 
                        the Securities Exchange Act of 1934 by reason 
                        of such individual being among the 3 highest 
                        compensated officers for the taxable year 
                        (other than any individual described in clause 
                        (i)).
        Such term shall include any employee who would be described in 
        subparagraph (B)(ii) if the reporting described in such 
        subparagraph were required as so described.''.
            (3) Conforming amendments.--
                    (A) The heading for section 162(m) of the Internal 
                Revenue Code of 1986 is amended by striking 
                ``Employee''.
                    (B) The heading for section 162(m)(4) is amended by 
                striking ``employee''.
    (b) Modification of Definition of Publicly Held Corporation.--
Section 162(m)(2) of the Internal Revenue Code of 1986 is amended--
            (1) by inserting ``, with respect to any taxable year,'' 
        after ``means'', and
            (2) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) that was required to file reports under 
                section 15(d) of such Act (15 U.S.C. 78o(d)) at any 
                time during the 3-taxable year period ending with such 
                taxable year.''.
    (c) Regulatory Authority.--
            (1) In general.--Section 162(m) of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        paragraph:
            ``(7) Regulations.--The Secretary may prescribe such 
        guidance, rules, or regulations as are necessary to carry out 
        the purposes of this subsection, including regulations--
                    ``(A) with respect to reporting, and
                    ``(B) to prevent avoidance of the purposes of this 
                section by providing compensation through a pass-
                through or other entity.''.
            (2) Conforming amendment.--Paragraph (6) of section 162(m) 
        of such Code is amended by striking subparagraph (H).
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2020.
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