The Director shall prohibit the regulated entities from providing compensation to any executive officer of the regulated entity that is not reasonable and comparable with compensation for employment in other similar businesses (including other publicly held financial institutions or major financial services companies) involving similar duties and responsibilities.
In making any determination under subsection (a), the Director may take into consideration any factors the Director considers relevant, including any wrongdoing on the part of the executive officer, and such wrongdoing shall include any fraudulent act or omission, breach of trust or fiduciary duty, violation of law, rule, regulation, order, or written agreement, and insider abuse with respect to the regulated entity. The approval of an agreement or contract pursuant to section 1723a(d)(3)(B) of this title or section 1452(h)(2) of this title shall not preclude the Director from making any subsequent determination under subsection (a).
In carrying out subsection (a), the Director may require a regulated entity to withhold any payment, transfer, or disbursement of compensation to an executive officer, or to place such compensation in an escrow account, during the review of the reasonableness and comparability of compensation.
In carrying out subsection (a), the Director may not prescribe or set a specific level or range of compensation.
The Director may prohibit or limit, by regulation or order, any golden parachute payment or indemnification payment.
The Director shall prescribe, by regulation, the factors to be considered by the Director in taking any action pursuant to paragraph (1), which may include such factors as-
No regulated entity may prepay the salary or any liability or legal expense of any affiliated party if such payment is made-
For purposes of this subsection, the term "golden parachute payment" means any payment (or any agreement to make any payment) in the nature of compensation by any regulated entity for the benefit of any affiliated party pursuant to an obligation of such regulated entity that-
Any payment which would be a golden parachute payment but for the fact that such payment was made before the date referred to in subparagraph (A)(ii) shall be treated as a golden parachute payment if the payment was made in contemplation of the occurrence of an event described in any subclause of such subparagraph.
For purposes of this subsection, the term "golden parachute payment" shall not include-
For purposes of this subsection, the following definitions shall apply:
Subject to paragraph (6), the term "indemnification payment" means any payment (or any agreement to make any payment) by any regulated entity for the benefit of any person who is or was an affiliated party, to pay or reimburse such person for any liability or legal expense with regard to any administrative proceeding or civil action instituted by the Agency which results in a final order under which such person-
The term "liability or legal expense" means-
The term "payment" includes-
No provision of this subsection shall be construed as prohibiting any regulated entity from purchasing any commercial insurance policy or fidelity bond, except that, subject to any requirement described in paragraph (5)(A)(iii), such insurance policy or bond shall not cover any legal or liability expense of the regulated entity which is described in paragraph (5)(A).
12 U.S.C. § 4518
EDITORIAL NOTES
AMENDMENTS2008- Pub. L. 110-289, §1113(a)(1), substituted "and withholding of executive" for "of excessive" in section catchline.Subsec. (a). Pub. L. 110-289, §1113(a)(2), substituted "regulated entity" for "enterprise" and "regulated entities" for "enterprises".Subsecs. (b) to (d). Pub. L. 110-289, §1113(a)(3), (4), added subsecs. (b) and (c) and redesignated former subsec. (b) as (d).Subsec. (e). Pub. L. 110-289, §1114, added subsec. (e).
STATUTORY NOTES AND RELATED SUBSIDIARIES
EQUITY IN GOVERNMENT COMPENSATION Pub. L. 114-93, 129 Stat. 1310, provided that:
"SECTION 1. SHORT TITLE."This Act may be cited as the 'Equity in Government Compensation Act of 2015'.
"SEC. 2. DEFINITIONS."In this Act: "(1) DIRECTOR.-The term 'Director' means the Director of the Federal Housing Finance Agency."(2) ENTERPRISE.-The term 'enterprise' means-"(A) the Federal National Mortgage Association and any affiliate thereof; and"(B) the Federal Home Loan Mortgage Corporation and any affiliate thereof.
"SEC. 3. REASONABLE PAY FOR CHIEF EXECUTIVE OFFICERS. "(a) SUSPENSION OF CURRENT COMPENSATION PACKAGE AND LIMITATION.-The Director shall suspend the compensation packages approved for 2015 for the chief executive officers of each enterprise and, in lieu of such packages, subject to the limitation under subsection (b), establish the compensation and benefits for each such chief executive officer at the same level in effect for such officer as of January 1, 2015, and such compensation and benefits may not thereafter be increased."(b) LIMITATION ON BONUSES.-Subsection (a) shall not be construed to affect the applicability of section 16 of the STOCK Act ( 12 U.S.C. 4518a ) to the chief executive officer of each enterprise."(c) APPLICABILITY.-Subsection (a) shall only apply to a chief executive officer of an enterprise if the enterprise is in conservatorship or receivership pursuant to section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 ( 12 U.S.C. 4617 ).
"SEC. 4. FANNIE AND FREDDIE CHIEF EXECUTIVE OFFICERS NOT FEDERAL EMPLOYEES."Any chief executive officer affected by any provision under section 3 shall not be considered a Federal employee."
- Agency
- The term "Agency" means the Federal Housing Finance Agency established under section 4511 of this title.
- Director
- The term "Director" means the Director of the Bureau.
- State
- The term "State" means any State, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands or any federally recognized Indian tribe, as defined by the Secretary of the Interior under section 5131(a) of title 25.
- affiliate
- The term "affiliate" means any person that controls, is controlled by, or is under common control with another person.
- compensation
- The term "compensation" means any payment of money or the provision of any other thing of current or potential value in connection with employment.
- enterprise
- The term "enterprise" means-(A) the Federal National Mortgage Association and any affiliate thereof; and(B) the Federal Home Loan Mortgage Corporation and any affiliate thereof.
- executive officer
- The term "executive officer" means, with respect to an enterprise, the chairman of the board of directors, chief executive officer, chief financial officer, president, vice chairman, any executive vice president, and any senior vice president in charge of a principal business unit, division, or function.
- person
- The term "person" means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.
- regulated entity
- The term "regulated entity" means-(A) the Federal National Mortgage Association and any affiliate thereof;(B) the Federal Home Loan Mortgage Corporation and any affiliate thereof; and(C) any Federal Home Loan Bank.
- violation
- The term "violation" includes any action (alone or in combination with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation.