This was a vote on a motion made by Rep. Sessions (R-TX) to recommit H.R. 3269. That bill imposed new restrictions on the manner in which the level of executive pay and bonuses was determined, and gave federal banking regulatory agencies the authority to prohibit certain pay structures. H.R. 3269 also mandated that all publicly traded companies hold an annual, non-binding shareholder vote on the level of pay and bonuses for their executives. The bill had been developed partly in response to the great outcry during this period of economic decline about the large bonuses that executives were receiving at banks and other financial institutions that had recently received federal “bail outs” in order to remain in business. The motion made by Rep. Sessions would have also added language to H.R.3269 that required the disclosure of information about any persons or organizations that spent funds in an effort to influence the outcome of the annual shareholder vote on executive pay and bonuses required by the bill.

Sessions, arguing on behalf of his motion, said it would require the same “transparency and accountability” as is now mandated for political contributions to political candidates. The donor’s name, occupation, and contribution size would have to be provided. Sessions also claimed that the new requirement in his motion would improve what he called “this interventionist legislation”, by providing information for shareholders.

Sessions also argued: “The point of the motion is to simply provide voters, in this case shareholders, with access to information about who is spending money and what are they attempting to influence with their vote.” He added: “(I)f we believe that voters deserve this information, we should also give to shareholders this same level of transparency.

Rep. Frank (D-MA), the chairman of the Financial Services Committee that developed H.R. 3269, opposed the motion. He objected to the fact that the disclosure requirement proposed in the motion would only apply to contributors on the executive pay and bonus issue, but if a donor wanted to influence a “vote on a merger or an acquisition or if you want to vote on anything else, you don't have to do it. It's not a uniform requirement . . . and leaves every other vote in the dark. If that's so important, why did we not have a broader version of it?”

Frank also claimed that the proposed disclosure requirement would be overly burdensome, and is designed to discourage contacts with shareholders. He supported this point by arguing: “(I)f you want to spend money to oppose large bonuses, to oppose large salaries, to oppose a company paying 72 percent of its revenue, as recently happened, in compensation, if you are a pension fund, if you are a union, if you want to write to your own members and say this is a bad idea . . . you have to give the identity of all persons or entities engaged in the activity and the activities engaged.  It is not simply a reporting of the amount of money.”

The amendment was defeated by a vote of 178-244. One hundred and seventy-two Republican and six Democrats voted “aye”. All two hundred and forty-four “nay” votes were cast by Democrats. As a result, the House moved immediately to a vote on passage of a bill that gave federal banking regulatory agencies the authority to prohibit certain executive pay and bonus structures, and imposed new restrictions on the manner in which executive pay and bonuses were determined.