[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1885 Introduced in Senate (IS)]

<DOC>






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.
                                 <all>