Corporate Management Accountability Act of 2021

Bill: 117-s-2145
Sponsor: full_name: Sen. Reed, Jack [D-RI]
Introduced: 2021-06-21
Policy area: Finance and Financial Sector
Subjects: Administrative law and regulatory procedures

Business records

Civil actions and liability

Corporate finance and management

Securities

Securities and Exchange Commission (SEC)

Wages and earnings
Latest action: action_date: 2022-04-26
text: Committee on Banking, Housing, and Urban Affairs. Hearings held.

Summaries:
action_date: 2021-06-21
action_desc: Introduced in Senate
text: <p><b>Corporate Management Accountability Act of 2021</b></p> <p>This bill directs the Securities and Exchange Commission to promulgate final rules requiring certain issuers of securities to disclose whether the issuer has established procedures to recoup from compensation paid to its executive officers fines and penalties for illegal behavior. If the issuer has not established such procedures, it must explain why it has not done so.</p>

tv_txt: II 117th CONGRESS 1st Session S. 2145 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. 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.