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Week Ending April 20, 2006

H.R.1257 To amend the Securities Exchange Act of 1934 to provide shareholders with an advisory vote on executive compensation.

This bill allows for a non-binding vote by shareholders in a corporation on approval of and executive compensation.

Corporate executives have been leaving with enormous amounts of money even when the company they ran is declining in profits. Corporate boards of directors generally agree to the executive’s pay and this bill would not impose the decision of the shareholders on the board’s decision. The new rules apply as of January 1, 2009.

Sponsor:  Rep. Barney Frank (D-MA-4^th)

Vote: Passed House 269 to 134 April 20, 2007 (RC 244). A motion to recommit the bill with instructions failed 184 to 222 (RC 243) April 20, 2007

Cost to the taxpayers: "Based on information from the SEC, CBO estimates that implementing H.R. 1257 would cost about $1 million in 2008 to develop regulations, and less than $500,000 per year thereafter to review and monitor compliance by companies affected by the regulations."

Earmark Certification:   Not applicable to this bill.

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MORE INFORMATION

AMENDMENTS

Items 1 through 8 of 8

1. H.AMDT.88 to H.R.1257 Amendment provides for placing the text of the bill into Section 14 rather than Section 16 of the Securities Exchange Act of 1934.
Sponsor: Rep Bachus, Spencer [AL-6] (introduced 4/18/2007)      Cosponsors (None)
Latest Major Action: 4/18/2007 House amendment agreed to. Status: On agreeing to the Bachus amendment (A001) Agreed to by voice vote.

2. H.AMDT.89 to H.R.1257 Amendment replaces language to clarify that shareholders may meet in special meetings held in lieu of the annual meeting.
Sponsor: Rep Roskam, Peter J. [IL-6] (introduced 4/18/2007)      Cosponsors (None)
Latest Major Action: 4/18/2007 House amendment agreed to. Status: On agreeing to the Roskam amendment (A002) Agreed to by voice vote.

3. H.AMDT.90 to H.R.1257 Amendment is technical in nature.
Sponsor: Rep Frank, Barney [MA-4] (introduced 4/18/2007)      Cosponsors (None)
Latest Major Action: 4/18/2007 House amendment agreed to. Status: On agreeing to the Frank (MA) amendment (A003) as modified Agreed to by voice vote.

4. H.AMDT.91 to H.R.1257 An amendment numbered 6 printed in the Congressional Record to insert a requirement for website disclosure of vote results.
Sponsor: Rep Jackson-Lee, Sheila [TX-18] (introduced 4/18/2007)      Cosponsors (None)
Latest Major Action: 4/18/2007 By unanimous consent, the Jackson-Lee (TX) amendment was withdrawn.

5. H.AMDT.92 to H.R.1257 An amendment numbered 13 printed in the Congressional Record to add a requirement for disclosure of activities to influence votes.
Sponsor: Rep Sessions, Pete [TX-32] (introduced 4/18/2007)      Cosponsors (None)
Latest Major Action: 4/18/2007 House amendment offered. Amendment failed April 20, 2007. 177 to 222 (RC 236)

6. H.AMDT.93 to H.R.1257 An amendment numbered 5 printed in the Congressional Record to insert a new paragraph outlining conditions triggering a vote.
Sponsor: Rep Garrett, Scott [NJ-5] (introduced 4/18/2007)      Cosponsors (None)
Latest Major Action: 4/18/2007 House amendment offered. Amendment failed April 20, 2007 155 to 244 (RC 237)

7. H.AMDT.94 to H.R.1257 An amendment numbered 3 printed in the Congressional Record to add a new paragraph providing for a majority-elected board exemption.
Sponsor: Rep Campbell, John [CA-48] (introduced 4/18/2007)      Cosponsors (None)
Latest Major Action: 4/18/2007 House amendment offered. Amendment failed April 20, 2007 161 to 241 (RC 238)

8. H.AMDT.95 to H.R.1257 An amendment numbered 7 printed in the Congressional Record to insert a new paragraph providing that a shareholder who is casting a permitted vote shall be required to disclose to beneficiaries whether such vote was cast to approve or disapprove compensation.
Sponsor: Rep McHenry, Patrick T. [NC-10] (introduced 4/18/2007)      Cosponsors (None)
Latest Major Action: 4/18/2007 House amendment offered. Amendment failed April 20, 2007 164 to 236 (RC 239)

9. H. AMDT 96 to HR 1257 (No. 9 printed in the Congressional Record of April 17, 2007) that sought to strike all after the enacting clause and insert a new section relating to disclosure of executive compensation.

Sponsor: Rep. Price

Latest Major Action: House amendment offered. Amendment failed April 20, 2007 148 to 257 (RC 240)

10. H Amdt 97 to HR 1257  (No. 11 printed in the Congressional Record of April 17, 2007) that sought to insert a new paragraph relating to deferred compensation exemption.

Sponsor: Rep Adam Putnam (R-FL)

Latest Major Action: Amendment Failed April 20, 2007 162 to 242 (RC 241)

11. H Amdt 98 to HR 1257 (No. 8 printed in the Congressional Record of April 17, 2007) that sought to add a new paragraph relating to conditional implementation.

Sponsor: Rep Charles Price

Latest Major Action: House amendment offered. Amendment failed April 20, 2007 162 to 242 (RC 242)

`(1) IN GENERAL- Any proxy or consent or authorization for an annual or other meeting of the shareholders occurring on or after January 1, 2009, shall permit a separate shareholder vote to approve the compensation of executives as disclosed pursuant to the Commission's compensation disclosure rules (which disclosure shall include the compensation discussion and analysis, the compensation tables, and any related material). The shareholder vote shall not be binding on the board of directors and shall not be construed as overruling a decision by such board, nor to create or imply any additional fiduciary duty by such board, nor shall such vote be construed to restrict or limit the ability of shareholders to make proposals for inclusion in such proxy materials related to executive compensation.

`(2) SHAREHOLDER APPROVAL OF GOLDEN PARACHUTE COMPENSATION-

`(A) DISCLOSURE- In any proxy solicitation material for an annual or other meeting of the shareholders occurring on or after January 1, 2009, that concerns an acquisition, merger, consolidation, or proposed sale or other disposition of substantially all the assets of an issuer, 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 relate to the acquisition, merger, consolidation, sale, or other disposition, and that have not been subject to a shareholder vote under paragraph (1).

`(B) SHAREHOLDER APPROVAL- The proxy solicitation material containing the disclosure required by subparagraph (A) shall require a separate shareholder vote to approve such agreements or understandings. A vote by the shareholders shall not be binding on the board of directors and shall not be construed as overruling a decision by such board, nor to create or imply any additional fiduciary duty by such board, nor shall such vote be construed to restrict or limit the ability of shareholders to make proposals for inclusion in such proxy materials related to executive compensation.'.

(b) Deadline for Rulemaking- Not later than 1 year after the date of the enactment of this Act, the Securities and Exchange Commission shall issue any final rules and regulations required by the amendments made by subsection (a).