Sec. 501. Shareholder votes on executive compensation

723 words·~3 min read·/bill/115/hr/2275/ih/section-501

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Section 14A(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78n–1(a) ) is amended by adding at the end the following: If a resolution required by paragraph

(1)or this subparagraph is not approved by vote of the shareholders, the issuer shall call a meeting of the shareholders at which there shall be, separately for each executive officer whose compensation was not approved in the earlier vote, a shareholder vote on a separate resolution to approve the compensation disclosed under subparagraph

(B)with respect to such executive officer. The proxy or consent or authorization for a meeting required by subparagraph

(A)shall disclose— pursuant to section 229.402 of title 17, Code of Federal Regulations, or any successor thereto, the compensation of each executive officer whose compensation will be subject to approval at such meeting; and in a clear and simple form in accordance with regulations to be promulgated by the Commission, any arrangements, whether or not written, that each such executive officer has with the issuer concerning the terms under which any type of compensation may be earned by or awarded to the executive officer, including in the future, unless such arrangements are disclosed under clause (i). The vote on the initial resolution required by subparagraph

(A)with respect to an executive officer shall occur not later than the end of the third quarter of the same fiscal year of the issuer in which the vote on the resolution required by paragraph

(1)occurs. If the initial resolution required by subparagraph

(A)with respect to an executive officer is not approved by the shareholders, the vote on the second resolution required by such subparagraph with respect to such executive officer shall occur not later than the date that is 90 days after the vote on the initial resolution required by such subparagraph with respect to such executive officer. If the second resolution required by subparagraph

(A)with respect to an executive officer, or any subsequent resolution required by such subparagraph with respect to such executive officer, is not approved by the shareholders, the vote on the next resolution required by such subparagraph with respect to such executive officer shall occur not later than the date that is 90 days after the vote on the previous resolution required by such subparagraph with respect to such executive officer. Subparagraph

(A)does not apply with respect to an individual who is no longer an executive officer of the issuer. . Section 14A(a)(2) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78n–1(a)(2) ) is amended by adding at the end the following: Such votes shall occur not less frequently than so determined. . Section 14A(c) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78n–1(c) ) is amended— in paragraph (2), by striking the semicolon and inserting ; or ; in paragraph (3), by striking ; or and inserting a period; by redesignating paragraphs

(1)through

(3)as subparagraphs

(A)through (C), respectively, and moving the margins of such subparagraphs 2 ems to the right; by striking and inserting the following: Rule of construction.— The shareholder vote referred to in subsections

(a)and

(b)Rules of construction.— Except for the shareholder vote required by paragraph

(2)of subsection (a), and except for the requirement of paragraph

(4)of such subsection for a shareholder vote on a subsequent resolution after failure of a previous resolution to be approved by the shareholders, a shareholder vote required by subsection

(a)or

(b); and by striking

(4)to restrict or limit and inserting the following: A shareholder vote required by subsection

(a)or

(b)may not be construed to restrict or limit . The amendments made by this section shall apply to an issuer— with respect to an additional shareholder vote under paragraph

(4)of section 14A(a) of the Securities Exchange Act of 1934, as added by subsection

(a)of this section, beginning with the first shareholder vote under paragraph

(1)of such section 14A(a) that occurs on or after the date that is 1 year after the date of the enactment of this Act; and with respect to a shareholder vote under paragraph

(2)of such section 14A(a), beginning with the first such vote that occurs on or after the date that is 1 year after the date of the enactment of this Act.

Connections3 off-index

3 references not yet in our index

15 USC 78n–1(a)
15 USC 78n–1(a)(2)
15 USC 78n–1(c)

Citation graph

cites case law

Sec. 501

Shareholder votes on executive compensation

Cite15 USC 78n–1(a)

Cite15 USC 78n–1(a)(2)

Cite15 USC 78n–1(c)

Cites 3Cited by 0 across 0 sources