SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stop CEO Excessive Pay Act''.

SEC. 2. DENIAL OF DEDUCTION FOR PAYMENTS OF EXCESSIVE COMPENSATION.

    (a) In General.--Section 162 of the Internal Revenue Code of 1986 
is amended by inserting after subsection (h) the following new 
subsections:
    ``(i) Excessive Compensation.--
            ``(1) In general.--No deduction shall be allowed under this 
        chapter for any excessive compensation for any employee of the 
        taxpayer.
            ``(2) Excessive compensation.--For purposes of this 
        subsection, the term `excessive compensation' means, with 
        respect to any employee, the amount by which the compensation 
        for services performed by such employee during the taxable year 
        exceeds the lesser of--
                    ``(A) the median of the compensation paid for 
                services performed by all employees of the taxpayer 
                during the taxable year, multiplied by 25, or
                    ``(B) $1,000,000.
            ``(3) Other definitions and special rules.--For purposes of 
        this subsection--
                    ``(A) Compensation.--The term `compensation' 
                includes wages, salary, fees, commissions, fringe 
                benefits, deferred compensation, retirement 
                contributions, options, bonuses, property, and any 
                other form of remuneration that the Secretary 
                determines is appropriate.
                    ``(B) Employer.--All persons treated as a single 
                employer under subsection (a) or (b) of section 52 or 
                subsection (m) or (o) of section 414 shall be treated 
                as a single taxpayer for purposes of this subsection.
                    ``(C) Employee.--The term `employee' includes full-
                time, part-time, and seasonal employees.
            ``(4) Reporting.--Each employer which provides any 
        excessive compensation to any employee during a taxable year 
        shall file a report with the Secretary with respect to such 
        taxable year including--
                    ``(A) the amount of compensation of the employee of 
                the taxpayer receiving the lowest amount of 
                compensation during such taxable year,
                    ``(B) the amount of compensation of the employee of 
                the taxpayer receiving the highest amount of 
                compensation during such taxable year,
                    ``(C) the median compensation of all employees of 
                the taxpayer during such taxable year,
                    ``(D) the number of employees of the taxpayer who 
                are receiving excessive compensation during such 
                taxable year, and
                    ``(E) the amount of compensation of each employee 
                described in subparagraph (D) during such taxable year.
        Such report shall be filed at such time and in such manner as 
        the Secretary may require.
    ``(j) Fines Relating to Executive Compensation.--No deduction shall 
be allowed under this chapter for any fine paid to the Securities and 
Exchange Commission under section 16(h)(4) of the Securities Exchange 
Act of 1934.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 3. AMENDMENT TO THE SECURITIES EXCHANGE ACT OF 1934.

    (a) In General.--Section 16 of the Securities Exchange Act of 1934 
(15 U.S.C. 78p) is amended by adding at the end the following:
    ``(h) Shareholder Approval of Executive Compensation.--
            ``(1) Calculation of compensation.--For purposes of this 
        subsection, the term `compensation' includes wages, salary, 
        fees, commissions, fringe benefits, deferred compensation, 
        retirement contributions, options, bonuses, property, and any 
        other form of remuneration that the Commission, in consultation 
        with the Secretary of the Treasury, determines is appropriate.
            ``(2) Limitation.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the compensation paid to an employee 
                of an issuer in any taxable year may not exceed the 
                lesser of--
                            ``(i) $1,000,000; or
                            ``(ii) an amount that is 25 times the 
                        median amount of compensation paid to all 
                        employees of that issuer during that taxable 
                        year.
                    ``(B) Exception.--An issuer may pay compensation 
                described in subparagraph (A) to an employee of the 
                issuer if, not more than 18 months before the last day 
                of the taxable year in which the compensation is paid, 
                not less than 50 percent of the shareholders of the 
                issuer vote to approve the compensation through a proxy 
                or consent or authorization for an annual or other 
                meeting of the shareholders.
            ``(3) Proxy contents.--Proxy materials for a shareholder 
        vote described in paragraph (2)(B) shall include, with respect 
        to the most recent taxable year ending before the date on which 
        the vote takes place--
                    ``(A) the amount of compensation paid to the lowest 
                paid employee of the issuer;
                    ``(B) the amount of compensation paid to the 
                highest paid employee of the issuer;
                    ``(C) the median amount of compensation paid to all 
                employees of the issuer;
                    ``(D) the number of employees of the issuer who are 
                paid compensation in an amount that is more than 25 
                times the amount described in subparagraph (C); and
                    ``(E) the total amount of compensation paid to the 
                employees described in subparagraph (D).
            ``(4) Money penalty.--
                    ``(A) In general.--The Commission may impose a 
                civil penalty against an issuer if--
                            ``(i) the issuer, in a taxable year, pays 
                        compensation to an employee of the issuer in an 
                        amount that exceeds the lesser of--
                                    ``(I) $1,000,000; or
                                    ``(II) 25 times the median amount 
                                of compensation paid to all employees 
                                of that issuer during that taxable 
                                year; and
                            ``(ii)(I) the issuer does not conduct a 
                        vote described in paragraph (2)(B) with respect 
                        to the compensation described in clause (i); or
                            ``(II) less than 50 percent of the 
                        shareholders of the issuer vote to approve the 
                        compensation described in clause (i), in 
                        contravention of the requirement under 
                        paragraph (2)(B).
                    ``(B) Amount of penalty.--The amount of the penalty 
                imposed under subparagraph (A) shall be equal to the 
                excess of--
                            ``(i) the compensation described in 
                        subparagraph (A)(i); over
                            ``(ii) the lesser of--
                                    ``(I) $1,000,000; or
                                    ``(II) the amount that is 25 times 
                                the median amount of compensation paid 
                                to all employees of the issuer during 
                                the taxable year in which that 
                                compensation is paid to that 
                                employee.''.
    (b) Deadline for Rulemaking.--Not later than 1 year after the date 
of enactment of this Act, the Securities and Exchange Commission shall 
issue any final rules and regulations required to carry out section 
16(h) of the Securities Exchange Act of 1934, as added by subsection 
(a).
Output: Stop CEO Excessive Pay Act  The bill amends the Internal Revenue Code, with respect to the deduction for trade or business expenses, to prohibit a deduction for excessive compensation for any employee of the taxpayer.  &quot;Excessive compensation&quot; is the amount by which the compensation for services performed by an employee during the year exceeds the lesser of: (1) the median of the compensation paid for services performed by all employees of the taxpayer during the taxable year, multiplied by 25; or (2) $1 million.  The bill amends the Securities Exchange Act of 1934 to: (1) prohibit an issuer from paying excessive compensation to an employee unless the compensation is approved by at least 50% of the shareholders, and (2) impose monetary penalties on issuers that violate the requirement. The bill also prohibits tax deductions for penalties paid to the Securities and Exchange Commission pursuant to this bill.