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it may) be paid or become payable to or on behalf of such executive officer. ‘‘(2) SHAREHOLDER APPROVAL.—Any proxy or consent or authorization relating to the proxy or consent solicitation mate- rial containing the disclosure required by paragraph (1) shall include a separate resolution subject to shareholder vote to approve such agreements or understandings and compensation as disclosed, unless such agreements or understandings have been subject to a shareholder vote under subsection (a). ‘‘(c) RULE OF CONSTRUCTION.—The shareholder vote referred to in subsections (a) and (b) shall not be binding on the issuer or the board of directors of an issuer, and may not be construed— ‘‘(1) as overruling a decision by such issuer or board of directors; ‘‘(2) to create or imply any change to the fiduciary duties of such issuer or board of directors; ‘‘(3) to create or imply any additional fiduciary duties for such issuer or board of directors; or ‘‘(4) to restrict or limit the ability of shareholders to make proposals for inclusion in proxy materials related to executive compensation. Reports. ‘‘(d) DISCLOSURE OF VOTES.—Every institutional investment Deadline. manager subject to section 13(f) shall report at least annually how it voted on any shareholder vote pursuant to subsections (a) and (b), unless such vote is otherwise required to be reported publicly by rule or regulation of the Commission. ‘‘(e) EXEMPTION.—The Commission may, by rule or order, exempt an issuer or class of issuers from the requirement under subsection (a) or (b). In determining whether to make an exemption under this subsection, the Commission shall take into account, among other considerations, whether the requirements under sub- sections (a) and (b) disproportionately burdens small issuers.’’.

SEC. 952. COMPENSATION COMMITTEE INDEPENDENCE.
(a) IN GENERAL.—The Securities Exchange Act of 1934 (15
U.S.C. 78 et seq.) is amended by inserting after section 10B, as
added by section 753, the following:

15 USC 78j–3. ‘‘SEC. 10C. COMPENSATION COMMITTEES.
‘‘(a) INDEPENDENCE OF COMPENSATION COMMITTEES.—
Regulations. ‘‘(1) LISTING STANDARDS.—The Commission shall, by rule,
direct the national securities exchanges and national securities
associations to prohibit the listing of any equity security of
an issuer, other than an issuer that is a controlled company,
limited partnership, company in bankruptcy proceedings, open-
ended management investment company that is registered
under the Investment Company Act of 1940, or a foreign private
issuer that provides annual disclosures to shareholders of the
reasons that the foreign private issuer does not have an inde-
pendent compensation committee, that does not comply with
the requirements of this subsection.
‘‘(2) INDEPENDENCE OF COMPENSATION COMMITTEES.—The
rules of the Commission under paragraph (1) shall require
that each member of the compensation committee of the board
of directors of an issuer be—

LAWS ‘‘(A) a member of the board of directors of the issuer; and ‘‘(B) independent.PUBLIC with on anorris VerDate Nov 24 2008 03:41 Aug 28, 2010 Jkt 089139 PO 00203 Frm 00526 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 GPO1 PsN: PUBL203