[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1885 Introduced in Senate (IS)]
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116th CONGRESS
1st Session
S. 1885
To ensure that irresponsible corporate executives, rather than
shareholders, pay fines and penalties.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 18, 2019
Mr. Reed introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To ensure that irresponsible corporate executives, rather than
shareholders, pay fines and penalties.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Corporate Management Accountability
Act of 2019''.
SEC. 2. FINE, PENALTY, AND SETTLEMENT ACCOUNTABILITY.
(a) Definitions.--In this section--
(1) the term ``Commission'' means the Securities and
Exchange Commission;
(2) the term ``covered fine or similar penalty''--
(A) means a fine or similar penalty, as that term
is defined in Treasury Regulation section 1.162-21(b);
and
(B) includes any fine or penalty--
(i) that is paid by a reporting company;
and
(ii) with respect to which the Commission
determines disclosure under subsection (b)(1)
is appropriate;
(3) the term ``issuer'' has the meaning given the term in
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a));
(4) the term ``named executive officer''--
(A) means an individual for whom disclosure is
required under section 229.402(a)(3) of title 17, Code
of Federal Regulations; and
(B) includes any other employee of a reporting
company with respect to whom the Commission determines
disclosure under subsection (b)(1) is appropriate; and
(5) the term ``reporting company'' means an issuer--
(A) the securities of which are registered under
section 12 of the Securities Exchange Act of 1934 (15
U.S.C. 78l); or
(B) that is required to file reports under section
15(d) of the Securities Exchange Act of 1934 (15 U.S.C.
78o(d)).
(b) Requirement To Issue Rules.--Not later than 360 days after the
date of enactment of this Act, the Commission shall issue final rules
to require each reporting company, in each annual report submitted
under section 13 or section 15(d) of the Securities Exchange Act of
1934 (15 U.S.C. 78m and 78o(d)), or in each proxy statement filed
pursuant to section 14(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78n(a)) for an annual meeting of shareholders, to--
(1) disclose whether the reporting company, in order to
align the incentives of those managing the reporting company
with the incentives of the shareholders of the reporting
company, has established procedures to recoup from compensation
paid to, and to withhold from future compensation paid to, any
named executive officer all or a portion of the cost of any
covered fine or similar penalty that has been paid by the
reporting company;
(2) if the reporting company has established procedures
described in paragraph (1)--
(A) provide a description of those procedures; and
(B) disclose the amount that the reporting company
has recouped from each named executive officer under
those procedures during each of the 3 most recent
fiscal years; and
(3) if the reporting company has not established procedures
described in paragraph (1), provide an explanation of why no
such procedures are necessary for the benefit of the
shareholders of the reporting company.
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