IB 

Union Calendar No. 268 

116TH CONGRESS 

1ST SESSION H. R. 4320 

[Report No. 116–337] 

To ensure that irresponsible corporate executives, rather than shareholders, 

pay fines and penalties. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 12, 2019 

Ms. PORTER introduced the following bill; which was referred to the 

Committee on Financial Services 

DECEMBER 11, 2019 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on September 12, 2019] 


pamtmann on DSKBC07HB2PROD with BILLS
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•HR 4320 RH

A BILL 

To ensure that irresponsible corporate executives, rather than 

shareholders, pay fines and penalties. 


pamtmann on DSKBC07HB2PROD with BILLS
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•HR 4320 RH

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 Management 

5 Accountability Act of 2019’’. 

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

8 (a) DEFINITIONS.—In this section— 

9 (1) the term ‘‘Commission’’ means the Securities 

10 and Exchange Commission; 

11 (2) the term ‘‘covered fine or similar penalty’’— 

12 (A) means a fine or similar penalty, as that 

13 term is defined in Treasury Regulation section 

14 1.162–21(b); and 

15 (B) includes any fine or similar penalty— 

16 (i) that is paid by a reporting com17 pany; and 

18 (ii) with respect to which the Commis19 sion determines disclosure under subsection 

20 (b)(1) is appropriate; 

21 (3) the term ‘‘issuer’’ has the meaning given the 

22 term in section 3(a) of the Securities Exchange Act 

23 of 1934 (15 U.S.C. 78c(a)); 

24 (4) the term ‘‘named executive officer’’— 


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•HR 4320 RH

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 report5 ing company with respect to whom the Commis6 sion determines disclosure under subsection 

7 (b)(1) is appropriate; and 

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

9 issuer— 

10 (A) the securities of which are registered 

11 under section 12 of the Securities Exchange Act 

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

13 (B) that is required to file reports under 

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

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

16 (b) REQUIREMENT TO ISSUE RULES.—Not later than 

17 360 days after the date of enactment of this Act, the Com18 mission shall issue final rules to require each reporting 

19 company, in each annual report submitted under section 

20 13 or section 15(d) of the Securities Exchange Act of 1934 

21 (15 U.S.C. 78m and 78o(d)), or in each proxy statement 

22 filed pursuant to section 14(a) of the Securities Exchange 

23 Act of 1934 (15 U.S.C. 78n(a)) for an annual meeting of 

24 shareholders, to— 


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•HR 4320 RH

1 (1) disclose whether the reporting company, in 

2 order to align the incentives of those managing the re3 porting company with the incentives of the share4 holders of the reporting company, has established pro5 cedures to recoup from compensation paid to, and to 

6 withhold from future compensation paid to, any 

7 named executive officer all or a portion of the cost of 

8 any covered fine or similar penalty that has been 

9 paid by the reporting company; 

10 (2) if the reporting company has established pro11 cedures described in paragraph (1)— 

12 (A) provide a description of those proce13 dures; and 

14 (B) disclose the amount that the reporting 

15 company has recouped from each named execu16 tive officer under those procedures during each of 

17 the 3 most recent fiscal years; and 

18 (3) if the reporting company has not established 

19 procedures described in paragraph (1), provide an ex20 planation of why no such procedures are necessary for 

21 the benefit of the shareholders of the reporting com22 pany. 


pamtmann on DSKBC07HB2PROD with BILLS
Union Calendar No. 268 

116TH CONGRESS 

1ST SESSION H. R. 4320 

[Report No. 116–337] 

A BILL 

rather than shareholders, pay fines and penalties. 

To ensure that irresponsible corporate executives, 

DECEMBER 11, 2019 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


pamtmann on DSKBC07HB2PROD with BILLS