NU Online News Service, May 30, 2:49 p.m.EDT
|A bill introduced in the House would bar financial firmofficials who are found liable for actions harming their companiesfrom purchasing insurance to cover the cost of the penaltiesimposed.
|The bill is the Executive Compensation Clawback Full EnforcementAct of 2012, to be introduced by Rep. Barney Frank, D-Mass. Thereis no bill number yet.
|Rep. Henry Waxman, D-Calif., ranking member of the House Energyand Commerce Committee, and Rep. Collin C. Peterson, D-Minn.,ranking member of the Agriculture Committee, are also originalcosponsors of this legislation.
|The bill would require any officer, director, or employee of afinancial firm who is required under a federal financial-regulatorylaw to repay previously earned compensation or to pay a civilpenalty to be personally liable for the amounts owed.
|These individuals would be prevented from using insurance orother forms of hedging to protect their personal assets, and theiremployers could not procure such protection on their behalf.
|In introducing the new legislation, Frank says he, Waxman andPeterson hope to prevent circumventing provisions of federal lawthat are designed to hold individuals personally responsible whentheir actions negatively affect their financial firms.
|Frank says, “The creation of insurance policies to insulatefinancial executives from clawbacks is one more effort by some inthe industry to perpetuate a lack of accountability.”
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
- Educational webcasts, resources from industry leaders, and informative newsletters.
- Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
