	Corporate Governance1

Concern about shareholder value, corporate governance, and the economic and social impact of escalating pay for corporate executives has led to a controversy regarding the practices of paying these executives. Recently Enacted Legislation

In the 110 th Congress, two laws containing executive compensation provisions applicable to executives of specific types of businesses were enacted: P.L. 110-289 , the Housing and Economic Recovery Act of 2008, and P.L. 110-343 to set forth somewhat different and more detailed restrictions on the compensation of executives of companies during the period in which any obligation arising from financial assistance provided under the Troubled Assets Relief Program (TARP) remains outstanding. Provisions to limit executive compensation, including golden parachute payments, have existed within the Internal Revenue Code (IRC) for many years; however, new provisions affecting entities receiving funds from the Troubled Assets Relief Program (TARP) were introduced in the 110 th Congress by the Emergency Economic Stabilization Act of 2008 (EESA). These are discussed in the corporate governance section of this report. Administrative expenses have a high statutory priority in bankruptcy and generally must be paid before other priority claims as well as non-priority unsecured claims. Congressional Proposals

Recent Congresses have offered a number of proposals concerning executive compensation. Proposals to Impose Limitations on TARP Recipients49

Bills concerning executive compensation limits have been introduced in the 111 th Congress. H.R. H.R. H.R. S. 651 proposed imposing an excise tax on "excessive bonuses." In the 110 th Congress, H.R. The bills also included a number of provisions that would indirectly limit executive compensation by linking it to compensation provided to other employees. Appendix. 110-343 ) and the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ).
Concern about shareholder value, corporate governance, and the economic and social impact of escalating pay for corporate executives has led to controversy regarding the practices of paying these executives. This report focuses on legal provisions related to tax, bankruptcy, and corporate governance that attempt to limit executive compensation. Many provisions have existed for a number of years, but some have a more recent origin in the 110th and 111th Congresses.
In the 110th Congress, two laws containing executive compensation provisions were enacted: P.L. 110-289, the Housing and Economic Recovery Act of 2008 (HERA), and P.L. 110-343, the Emergency Economic Stabilization Act of 2008 (EESA). In the 111th Congress, H.R. 1, the American Recovery and Reinvestment Act of 2009 (ARRA), became law (P.L. 111-5). Title VII of ARRA sets forth restrictions on the compensation of executives of companies during the period in which any obligation arising from financial assistance provided under the Troubled Assets Relief Program (TARP) remains outstanding and requires standards and a review board to determine appropriate executive compensation, which must be voted on by shareholders of TARP recipients.
In the wake of American International Group's (AIG's) bonus announcement, several bills (H.R. 1575, H.R. 1586, H.R. 1664, and S. 651) were introduced in the 111th Congress to recover, directly or indirectly, bonuses paid by TARP recipients and to discourage future bonus payments. Other bills have also been introduced in the recent Congresses concerning limiting executive compensation. These bills include proposals to modify the corporate governance provisions as well as the Bankruptcy and Internal Revenue Codes.
This report includes, as an Appendix, Table A-1, which outlines a number of statutory provisions that limit executive compensation.