Stop CEO Excessive Pay Act

“(i) Excessive compensation

“(1) In general—No deduction shall be allowed under this chapter for any excessive compensation for any employee of the taxpayer.

“(2) Excessive compensation—For purposes of this subsection, the term excessive compensation means, with respect to any employee, the amount by which the compensation for services performed by such employee during the taxable year exceeds the lesser of—

“(A) the median of the compensation paid for services performed by all employees of the taxpayer during the taxable year, multiplied by 25, or

“(B) $1,000,000.

“(3) Other definitions and special rules—For purposes of this subsection—

“(A) Compensation—The term compensation includes wages, salary, fees, commissions, fringe benefits, deferred compensation, retirement contributions, options, bonuses, property, and any other form of remuneration that the Secretary determines is appropriate.

“(B) Employer—All persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as a single taxpayer for purposes of this subsection.

“(C) Employee—The term employee includes full-time, part-time, and seasonal employees.

“(4) Reporting—Each employer which provides any excessive compensation to any employee during a taxable year shall file a report with the Secretary with respect to such taxable year including—

“(A) the amount of compensation of the employee of the taxpayer receiving the lowest amount of compensation during such taxable year,

“(B) the amount of compensation of the employee of the taxpayer receiving the highest amount of compensation during such taxable year,

“(C) the median compensation of all employees of the taxpayer during such taxable year,

“(D) the number of employees of the taxpayer who are receiving excessive compensation during such taxable year, and

“(E) the amount of compensation of each employee described in subparagraph (D) during such taxable year.

“(j) Fines relating to executive compensation—No deduction shall be allowed under this chapter for any fine paid to the Securities and Exchange Commission under section 16(h)(4) of the Securities Exchange Act of 1934.”

“(h) Shareholder approval of executive compensation

“(1) Calculation of compensation—For purposes of this subsection, the term compensation includes wages, salary, fees, commissions, fringe benefits, deferred compensation, retirement contributions, options, bonuses, property, and any other form of remuneration that the Commission, in consultation with the Secretary of the Treasury, determines is appropriate.

“(2) Limitation

“(A) In general—Except as provided in subparagraph (B), the compensation paid to an employee of an issuer in any taxable year may not exceed the lesser of—

“(i) $1,000,000; or

“(ii) an amount that is 25 times the median amount of compensation paid to all employees of that issuer during that taxable year.

“(B) Exception—An issuer may pay compensation described in subparagraph (A) to an employee of the issuer if, not more than 18 months before the last day of the taxable year in which the compensation is paid, not less than 50 percent of the shareholders of the issuer vote to approve the compensation through a proxy or consent or authorization for an annual or other meeting of the shareholders.

“(3) Proxy contents—Proxy materials for a shareholder vote described in paragraph (2)(B) shall include, with respect to the most recent taxable year ending before the date on which the vote takes place—

“(A) the amount of compensation paid to the lowest paid employee of the issuer;

“(B) the amount of compensation paid to the highest paid employee of the issuer;

“(C) the median amount of compensation paid to all employees of the issuer;

“(D) the number of employees of the issuer who are paid compensation in an amount that is more than 25 times the amount described in subparagraph (C); and

“(E) the total amount of compensation paid to the employees described in subparagraph (D).

“(4) Money penalty

“(A) In general—The Commission may impose a civil penalty against an issuer if—

“(i) the issuer, in a taxable year, pays compensation to an employee of the issuer in an amount that exceeds the lesser of—

“(I) $1,000,000; or

“(II) 25 times the median amount of compensation paid to all employees of that issuer during that taxable year; and

“(ii)

“(I) the issuer does not conduct a vote described in paragraph (2)(B) with respect to the compensation described in clause (i); or

“(II) less than 50 percent of the shareholders of the issuer vote to approve the compensation described in clause (i), in contravention of the requirement under paragraph (2)(B).

“(B) Amount of penalty—The amount of the penalty imposed under subparagraph (A) shall be equal to the excess of—

“(i) the compensation described in subparagraph (A)(i); over

“(ii) the lesser of—

“(I) $1,000,000; or

“(II) the amount that is 25 times the median amount of compensation paid to all employees of the issuer during the taxable year in which that compensation is paid to that employee.”