1

SEC. 951. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION DISCLOSURES.

2

 

3

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is

4

amended by inserting after section 14 (15 U.S.C. 78n) the following:

5

 

6

 

7

SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.

8

 

9

    ``(a) <>  Separate Resolution Required.--

10

            ``(1) In general.--Not less frequently than once every 3

11

        years, a proxy or consent or authorization for an annual or

12

        other meeting of the shareholders for which the proxy

13

        solicitation rules of the Commission require compensation

14

        disclosure shall include a separate resolution subject to

15

        shareholder vote to approve the compensation of executives, as

16

        disclosed pursuant to section 229.402 of title 17, Code of

17

        Federal Regulations, or any successor thereto.

18

            ``(2) Frequency of vote.--Not less frequently than once

19

        every 6 years, a proxy or consent or authorization for an annual

20

        or other meeting of the shareholders for which the proxy

21

        solicitation rules of the Commission require compensation

22

        disclosure shall include a separate resolution subject to

23

        shareholder vote to determine whether votes on the resolutions

24

        required under paragraph (1) will occur every 1, 2, or 3 years.

25

            ``(3) Effective date.--The proxy or consent or authorization

26

        for the first annual or other meeting of the shareholders

27

        occurring after the end of the 6-month period beginning on the

28

        date of enactment of this section shall include--

29

                    ``(A) the resolution described in paragraph (1); and

30

                    ``(B) a separate resolution subject to shareholder

31

                vote to determine whether votes on the resolutions

32

                required under paragraph (1) will occur every 1, 2, or 3

33

                years.

34

 

35

    ``(b) Shareholder Approval of Golden Parachute Compensation.--

36

            ``(1) Disclosure.-- <> In any proxy or

37

        consent solicitation material (the solicitation of which is

38

        subject to the rules of the Commission pursuant to subsection

39

        (a)) for a meeting of the shareholders occurring after the end

40

        of the 6-month period beginning on the date of enactment of this

41

        section, at which shareholders are asked to approve an

42

        acquisition, merger, consolidation, or proposed sale or other

43

        disposition of all or substantially all the assets of an issuer,

44

        the person making such solicitation shall disclose in the proxy

45

        or consent solicitation material, in a clear and simple form in

46

        accordance with regulations to be promulgated by the Commission,

47

        any agreements or understandings that such person has with any

48

        named executive officers of such issuer (or of the acquiring

49

        issuer, if such issuer is not the acquiring issuer) concerning

50

        any type of compensation (whether present, deferred, or

51

        contingent) that is based on or otherwise relates to the

52

        acquisition, merger, consolidation, sale, or other disposition

53

        of all or substantially all of the assets of the issuer and the

54

        aggregate total of all such compensation that may (and the

55

        conditions upon which it may) be paid or become payable to or on

56

        behalf of such executive officer.

57

            ``(2) Shareholder approval.--Any proxy or consent or

58

        authorization relating to the proxy or consent solicitation

59

        material containing the disclosure required by paragraph (1)

60

        shall include a separate resolution subject to shareholder vote

61

        to approve such agreements or understandings and compensation as

62

        disclosed, unless such agreements or understandings have been

63

        subject to a shareholder vote under subsection (a).

64

 

65

    ``(c) Rule of Construction.--The shareholder vote referred to in

66

subsections (a) and (b) shall not be binding on the issuer or the board

67

of directors of an issuer, and may not be construed--

68

            ``(1) as overruling a decision by such issuer or board of

69

        directors;

70

            ``(2) to create or imply any change to the fiduciary duties

71

        of such issuer or board of directors;

72

            ``(3) to create or imply any additional fiduciary duties for

73

        such issuer or board of directors; or

74

            ``(4) to restrict or limit the ability of shareholders to

75

        make proposals for inclusion in proxy materials related to

76

        executive compensation.

77

 

78

    ``(d) Disclosure of Votes.-- <> Every

79

institutional investment manager subject to section 13(f) shall report

80

at least annually how it voted on any shareholder vote pursuant to

81

subsections (a) and (b), unless such vote is otherwise required to be

82

reported publicly by rule or regulation of the Commission.

83

 

84

    ``(e) Exemption.--The Commission may, by rule or order, exempt an

85

issuer or class of issuers from the requirement under subsection (a) or

86

(b). In determining whether to make an exemption under this subsection,

87

the Commission shall take into account, among other considerations,

88

whether the requirements under subsections (a) and (b)

89

disproportionately burdens small issuers.''.