Shareholder Vote on Executive Compensation Act - Amends the Securities Exchange Act of 1934 to require a proxy, consent, or authorization for a shareholder meeting occurring on or after January 1, 2009, to permit a separate shareholder vote to approve executive compensation.
States that such shareholder vote shall not be binding on the board of directors, nor construed: (1) as overruling a board decision; (2) to create or imply additional fiduciary duty by such board; and (3) to restrict or limit shareholder ability to make proposals for inclusion in proxy materials related to executive compensation.
Requires proxy solicitation material for a shareholder meeting occurring on or after January 1, 2009, concerning disposition of substantially all of an issuer's assets, to disclose compensation agreements or understandings with the principal executive officers of either the issuer or acquiring issuer regarding any type of (golden parachute) compensation which: (1) relates to such disposition; and (2) has not been subject to a shareholder vote.
Provides that proxy solicitation material containing such executive compensation disclosures shall require a separate shareholder vote to approve such agreements or understandings.
States that such shareholder vote shall not be binding on the board of directors, nor construed: (1) as overruling a board decision; (2) to create or imply additional fiduciary duty by such board; and (3) to constrain shareholder ability to make proposals for inclusion in proxy materials related to executive compensation.
[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1181 Introduced in Senate (IS)]
110th CONGRESS
1st Session
S. 1181
To amend the Securities Exchange Act of 1934 to provide shareholders
with an advisory vote on executive compensation.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 20, 2007
Mr. Obama introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Securities Exchange Act of 1934 to provide shareholders
with an advisory vote on executive compensation.
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 ``Shareholder Vote on Executive
Compensation Act''.
SEC. 2. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION DISCLOSURES.
(a) Amendment.--Section 16 of the Securities Exchange Act of 1934
(15 U.S.C. 78n) is amended by adding at the end the following new
subsection:
``(h) Annual Shareholder Approval of Executive Compensation.--
``(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).
<all>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
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