I 

116TH CONGRESS 

1ST SESSION H. R. 4320 

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 

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 2019’’. 

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

8 (a) DEFINITIONS.—In this section— 

9 (1) the term ‘‘Commission’’ means the Securi10 ties and Exchange Commission; 


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1 (2) the term ‘‘covered fine or similar pen2 alty’’— 

3 (A) means a fine or similar penalty, as 

4 that term is defined in Treasury Regulation 

5 section 1.162–21(b); and 

6 (B) includes any fine or similar penalty— 

7 (i) that is paid by a reporting com8 pany; and 

9 (ii) with respect to which the Commis10 sion determines disclosure under sub11 section (b)(1) is appropriate; 

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

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

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

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

16 (A) means an individual for whom disclo17 sure is required under section 229.402(a)(3) of 

18 title 17, Code of Federal Regulations; and 

19 (B) includes any other employee of a re20 porting company with respect to whom the 

21 Commission determines disclosure under sub22 section (b)(1) is appropriate; and 

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

24 issuer— 


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1 (A) the securities of which are registered 

2 under section 12 of the Securities Exchange 

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

4 (B) that is required to file reports under 

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

6 1934 (15 U.S.C. 78o(d)). 

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

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

9 the Commission shall issue final rules to require each re10 porting company, in each annual report submitted under 

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

12 of 1934 (15 U.S.C. 78m and 78o(d)), or in each proxy 

13 statement filed pursuant to section 14(a) of the Securities 

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

15 meeting of shareholders, to— 

16 (1) disclose whether the reporting company, in 

17 order to align the incentives of those managing the 

18 reporting company with the incentives of the share19 holders of the reporting company, has established 

20 procedures to recoup from compensation paid to, 

21 and to withhold from future compensation paid to, 

22 any named executive officer all or a portion of the 

23 cost of any covered fine or similar penalty that has 

24 been paid by the reporting company; 


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1 (2) if the reporting company has established 

2 procedures described in paragraph (1)— 

3 (A) provide a description of those proce4 dures; and 

5 (B) disclose the amount that the reporting 

6 company has recouped from each named execu7 tive officer under those procedures during each 

8 of the 3 most recent fiscal years; and 

9 (3) if the reporting company has not estab10 lished procedures described in paragraph (1), pro11 vide an explanation of why no such procedures are 

12 necessary for the benefit of the shareholders of the 

13 reporting company. 

Æ 


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