Floor Situation

Amendments to H.R. 1664 are expected to be considered on the floor of the House on Wednesday, April 1, 2009, under a structured rule (H.Res. 360), which allows consideration of seven amendments, including a Manager's Amendment offered by Chairman Frank.  Each amendment will be debatable for ten minutes, except for the Manager's Amendment, which will be debatable for 20 minutes. 

The legislation was introduced by Rep. Alan Grayson (D-FL) on March 23, 2009, and referred to the Committee on Financial Services, which reported the bill on March 26, 2009, by a vote of 38-22.  For a complete summary of H.R. 1664, please see the Legislative Digest for April 1, 2009.

 

Bill Summary

1.  Amendment #10, Frank (D-MA)-Contains the Manager's Amendment, which will be offered by Chairman Frank.  The amendment includes a number of clarifications and modifications to the underlying legislation which are summarized below.

• States that an institution will not become subject to the compensation limitations in the legislation as a result of doing business with a institution that has received a direct capital infusion from the Troubled Asset Relief Program (TARP) or the Housing and Economic Recovery Act of 2008 (HERA).

• Clarifies that "compensation" subject to limitation under the legislation does not include severance pay, unless the severance pay exceeds $250,000.

• Establishes the Commission on Executive Compensation to conduct a study of the executive compensation system for TARP recipients.  The Commission would be required to examine haw closely executive pay is linked to company performance, factors influencing executive pay, and incentives that affect executive behavior.  The Commission would be required to report its findings within 90 days and make recommendations for legislative, executive, and voluntary actions that should be taken regarding executive compensation paid by TARP recipients.

• The Commission would be composed of 9 members appointed by the Council of Economic Advisers and the Majority and Minority Leaders of the House and Senate.  The Commission would have one chairman, appointed by the chairman of the House Financial Services Committee.

2.  Amendment #11, Cardoza (D-CA)-Exempts community financial institutions that have received less than $250,000 in direct TARP capital investments from the compensation limits imposed under the legislation.

3.  Amendment #3, Meeks (D-NY)-Exempts any institutions that received TARP funds prior to enactment of this legislation from the compensation limits imposed by the bill.  In its current form, the legislation would impose compensation restrictions on employees of any entity that has an outstanding direct capital investment from TARP, regardless of when the investment took place.

4.  Amendment #14, Bean (D-IL)/McMahon (D-NY)-Exempts TARP recipients that have entered into comprehensive repayment agreements with the Secretary of Treasury from the compensation limits imposed by the bill.  The limitations would be reinstated if the TARP recipient defaulted on the repayment program.  In its current form, the legislation would impose compensation restrictions until the full amount of federal capital infusions are repaid.

5.  Amendment #15, Bilirakis (R-FL)-Clarifies that an institution shall not become subject to the requirements of the legislation as a result of doing business with a TARP recipient.

6.  Amendment #6, DeFazio (D-OR)-Amends the Emergency Economic Stabilization Act (EESA), which established TARP, by requiring that shareholders vote to approve executive compensation and prohibit any executive compensation payment with such approval.

7.  Amendment #14, Dahlkemper (D-PA)-Defines bonus payments as any payments made before, during, or after an individual's employment with a TARP recipient and requires the Secretary of Treasury to consider any property or services provided by an TARP recipient as compensation.