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senate Bill S. 1912

Should Publicly Traded Companies Disclose Whether Executives or Shareholders Pay the Company's Fines?

Argument in favor

Senior executives need to take more responsibility for fines levied against their corporation that they’re accountable for. That means giving up some of their compensation so shareholders don’t have to foot the bill.

Eric's Opinion
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03/25/2018
They are publicly traded. They are supposed to reveal all business transactions for the shareholders. It's not big government to make it public. It's the opposite. The more you make it public the less chance for corruption.
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Tama's Opinion
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03/25/2018
This transparency helps shareholders and employees. The need to disclose also provides an incentive for better behavior.
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Judith's Opinion
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03/25/2018
ENOUGH OF A THIS GRAB AS RAT CAN GRAB BEHAVIOR IN BUSINESS ! EXECUTIVE OFFICERS MUST EQUALLY SHARE THE BURDEN AND RAMIFICATIONS FROM THE DECISIONS THEY MAKE THAT ARE EITHER GOOD OR BAD FOR THE COMPANY, EMPLOYEES AND SHAREHOLDERS,THE ECOLOGY, THE NATION,OUR CITIZENRY AND THE CUSTOMERS, ! ENOUGH OF THIS GRAB AS RAT CAN GRAB BEHAVIOR !!!
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Argument opposed

Corporations as a whole should be responsible for paying fines and penalties assessed against them, they shouldn’t be “encouraged” by the SEC to make executives foot the bill.

William's Opinion
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03/25/2018
I do not support this bill. Publicly traded companies are private entities. They are not subject to transparency like the federal or state government. It is unconscionable and ridiculous to apply the federal standard to private corporations. These are for profit entities they do not act in the public interest. Corporations act in the interest of their shareholders. It is up to the Shareholders to understand how the private entity works. Where there is profit there is risk.
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Scott's Opinion
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03/25/2018
Why is the federal government telling corporations how to run their business? They can’t even do their own job such as pass a responsible budget.
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Bernie's Opinion
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03/25/2018
Funny how transparency never occurred during any of Obama’s “public actions”. TPP? You had to go to a secret room and couldn’t tell anyone what was in it. ( where is Sandy Berger and his sock when you need it?). For those of you who don’t know the Sandy Berger-sock situation, crawl out into the sunlight and turn to stone.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
    IntroducedOctober 3rd, 2017

What is Senate Bill S. 1912?

This bill would require publicly traded companies to disclose in their annual reports and proxy statements whether a company has established procedures to recoup compensation executive officers to pay for fines or penalties assessed to the corporation. Companies would be required by the Securities and Exchange Commission to disclose the amount recouped from any executive officer during the three most recent fiscal years. If a company hasn’t established such procedures, it would be required to provide an explanation of why they aren’t beneficial for the company’s shareholders.

Impact

Shareholders; publicly traded companies; senior executives; and the SEC.

Cost of Senate Bill S. 1912

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Sen. Jack Reed (D-RI) introduced this bill to require publicly traded companies to disclose policies on whether senior executives or shareholders bear the costs of paying the company’s fines and penalties:

“Senior executives, many of whom are eager to take credit for a company’s good news, must also take more responsibility for the bad news, especially if it is true that the buck stops with them. For example, the Financial Crisis Inquiry Commission concluded ‘the financial crisis reached cataclysmic proportions with the collapse of Lehman Brothers,’ and yet, according to the Congressional Research Service, not a single senior executive officer at Lehman Brothers at the federal level was charged, went to jail, or personally paid a federal fine or penalty for the damage caused at Lehman Brothers that rippled through our economy in 2008.  Companies must do a better job of aligning executive incentives so that they are motivated to put their shareholders, and not themselves, first.”


Media:

Summary by Eric Revell

(Photo Credit: FangXiaNuo / iStock)

AKA

Corporate Management Accountability Act of 2017

Official Title

A bill to ensure that irresponsible corporate executives, rather than shareholders, pay fines and penalties.

    They are publicly traded. They are supposed to reveal all business transactions for the shareholders. It's not big government to make it public. It's the opposite. The more you make it public the less chance for corruption.
    Like (70)
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    I do not support this bill. Publicly traded companies are private entities. They are not subject to transparency like the federal or state government. It is unconscionable and ridiculous to apply the federal standard to private corporations. These are for profit entities they do not act in the public interest. Corporations act in the interest of their shareholders. It is up to the Shareholders to understand how the private entity works. Where there is profit there is risk.
    Like (14)
    Follow
    Share
    This transparency helps shareholders and employees. The need to disclose also provides an incentive for better behavior.
    Like (43)
    Follow
    Share
    ENOUGH OF A THIS GRAB AS RAT CAN GRAB BEHAVIOR IN BUSINESS ! EXECUTIVE OFFICERS MUST EQUALLY SHARE THE BURDEN AND RAMIFICATIONS FROM THE DECISIONS THEY MAKE THAT ARE EITHER GOOD OR BAD FOR THE COMPANY, EMPLOYEES AND SHAREHOLDERS,THE ECOLOGY, THE NATION,OUR CITIZENRY AND THE CUSTOMERS, ! ENOUGH OF THIS GRAB AS RAT CAN GRAB BEHAVIOR !!!
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    Of course it only make sense
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    Yes, shareholders are investing to make profits not to pay hush money for individual’s and or corporate’s misdeeds or illegal actions.
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    Full disclosure required.
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    I can’t afford to buy stocks. But if I had that type of information, I could make more ethical choices as a consumer. You’d say. If shareholders want that kind of information they’ll demand it. And if companies want investors they’ll provide said information. But it doesn’t work that way because not enough of the capitalists who buy stocks care about the ethics of the firms they’re investing in.
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    Why is the federal government telling corporations how to run their business? They can’t even do their own job such as pass a responsible budget.
    Like (6)
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    They make company policies they should pay when they screw up
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    Funny how transparency never occurred during any of Obama’s “public actions”. TPP? You had to go to a secret room and couldn’t tell anyone what was in it. ( where is Sandy Berger and his sock when you need it?). For those of you who don’t know the Sandy Berger-sock situation, crawl out into the sunlight and turn to stone.
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    Are you kidding me? Why should the shareholders unknowingly pay for misdeeds of the people who work for them?
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    Is there legislation in place that already addresses this issue? Is this a ploy to create fake legislation in an attempt to trigger the removal of better legislation with fewer loopholes?
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    Corporations are strange legal entities, they are considered to be persons, yet they can break any and all laws with impunity, knowing that the corporation can never lose its freedom and keep its immortality. They are also unable to do anything except carry out the decisions made by its executives no matter how grotesque and immoral. The only way to call corporations to account for their behaviors is to hold responsible the persons who direct a corporation’s behavior responsible for the decisions they make. The owners of the corporation (the shareholders) should know how the corporation spends its assets.
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    A public company has as to disclose all financial information, fines should be disclosed as well
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    And they all should be made to disclose where the monies came from to pay the fines.
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    Yes. Company fines should be tied to executive compensation so that they are incentivized to help company performance.
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    One word... transparency.
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    SHOW THE CORRUPTION!! BET THE DICTATOR #45 WILL BE TOP ON THE LIST
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    If the fine is it a result of any officers’ negligence, or intentional deceit, then the officers should be held liable, in my opinion.
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