II 

117TH CONGRESS 

1ST SESSION S. 2145 

To ensure that irresponsible corporate executives, rather than shareholders, 

pay fines and penalties. 

IN THE SENATE OF THE UNITED STATES 

JUNE 21, 2021 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Corporate Manage5 ment Accountability Act of 2021’’. 

6 SEC. 2. FINE, PENALTY, AND SETTLEMENT ACCOUNT7 ABILITY. 

8 (a) DEFINITIONS.—In this section— 

9 (1) the term ‘‘accountable executive’’— 


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1 (A) means an individual for whom disclo2 sure is required under section 229.402(a)(3) of 

3 title 17, Code of Federal Regulations; and 

4 (B) includes any other employee of a re5 porting company with respect to whom the 

6 Commission determines disclosure under sub7 section (b)(1) is appropriate; 

8 (2) the term ‘‘Commission’’ means the Securi9 ties and Exchange Commission; 

10 (3) the term ‘‘covered fine or similar pen11 alty’’— 

12 (A) means any amount to which section 

13 162(f) of the Internal Revenue Code of 1986 

14 applies; and 

15 (B) includes any fine, penalty, or pay16 ment— 

17 (i) that is paid or incurred by a re18 porting company; and 

19 (ii) with respect to which the Commis20 sion determines disclosure under sub21 section (b) should be required; 

22 (4) the term ‘‘issuer’’ has the meaning given 

23 the term in section 3(a) of the Securities Exchange 

24 Act of 1934 (15 U.S.C. 78c(a)); and 


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1 (5) the term ‘‘reporting company’’ means an 

2 issuer— 

3 (A) the securities of which are registered 

4 under section 12 of the Securities Exchange 

5 Act of 1934 (15 U.S.C. 78l); or 

6 (B) that is required to file reports under 

7 section 15(d) of the Securities Exchange Act of 

8 1934 (15 U.S.C. 78o(d)). 

9 (b) REQUIREMENT TO ISSUE RULES.—Not later 

10 than 360 days after the date of enactment of this Act, 

11 the Commission shall issue final rules to require each re12 porting company, in each annual report submitted under 

13 section 13 or section 15(d) of the Securities Exchange Act 

14 of 1934 (15 U.S.C. 78m, 78o(d)), or in each proxy state15 ment filed pursuant to section 14(a) of the Securities Ex16 change Act of 1934 (15 U.S.C. 78n(a)) for an annual 

17 meeting of shareholders, to— 

18 (1) disclose whether the reporting company has 

19 established procedures to recoup from compensation 

20 paid to, and to withhold from future compensation 

21 paid to, any accountable executive all or a portion of 

22 the cost of any covered fine or similar penalty that 

23 has been paid or incurred by the reporting company; 

24 (2) if the reporting company has established 

25 procedures described in paragraph (1)— 


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1 (A) provide a description of those proce2 dures; and 

3 (B) disclose the amount that the reporting 

4 company has recouped from each accountable 

5 executive under those procedures during each of 

6 the 3 most recent fiscal years; and 

7 (3) if the reporting company has not estab8 lished procedures described in paragraph (1), pro9 vide an explanation of why the reporting company 

10 has not done so. 

Æ 


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