117 S2145 IS: Corporate Management Accountability Act of 2021 U.S. Senate 2021-06-21 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

II117th CONGRESS1st SessionS. 2145IN THE SENATE OF THE UNITED STATESJune 21, 2021Mr. Reed introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban AffairsA BILLTo ensure that irresponsible corporate executives, rather than shareholders, pay fines and penalties.

1.

Short title

This Act may be cited as the Corporate Management Accountability Act of 2021.

2.

Fine, penalty, and settlement accountability

(a)

Definitions

In this section—(1)the term accountable executive—(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; (2)the term Commission means the Securities and Exchange Commission;(3)the term covered fine or similar penalty—(A)means any amount to which section 162(f) of the Internal Revenue Code of 1986 applies; and(B)includes any fine, penalty, or payment—(i)that is paid or incurred by a reporting company; and(ii)with respect to which the Commission determines disclosure under subsection (b) should be required;(4)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)); 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, 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 has established procedures to recoup from compensation paid to, and to withhold from future compensation paid to, any accountable executive all or a portion of the cost of any covered fine or similar penalty that has been paid or incurred 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 accountable executive 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 the reporting company has not done so.