[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 790 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 790
To align executive compensation with sustainable value creation, and
for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 14, 2023
Mr. Warner (for himself, Ms. Warren, and Ms. Baldwin) introduced the
following bill; which was read twice and referred to the Committee on
Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To align executive compensation with sustainable value creation, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Advancing Long-term Incentives for
Governance Now Act'' or the ``ALIGN Act''.
SEC. 2. RESTRICTIONS ON SALE OF SHARES FOLLOWING STOCK BUYBACKS.
(a) Definitions.--In this section:
(1) Covered issuer.--The term ``covered issuer'' means an
issuer, a security of which is registered under subsection (b)
or (g) of section 12 of the Securities Exchange Act of 1934 (15
U.S.C. 78l).
(2) Covered person.--The term ``covered person'' means an
executive officer, as that term is defined in section 240.3b-7
of title 17, Code of Federal Regulations, or any successor
regulation, with respect to a covered issuer.
(3) Equity security; issuer; security.--The terms ``equity
security'', ``issuer'', and ``security'' have the meanings
given the terms in section 3(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)).
(4) Share repurchase authorization.--The term ``share
repurchase authorization'' means an authorization by the board
of directors of a covered issuer to purchase shares of the
covered issuer.
(5) Subject security.--The term ``subject security'' means
any equity security of a covered issuer that is awarded to a
covered person with respect to that covered issuer as part of
the compensation of that covered person.
(b) Disclosure of Share Repurchase Authorization.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Securities and Exchange Commission
shall issue regulations to require covered issuers to publicly
disclose a share repurchase authorization not later than 1
business day after the authorization has occurred.
(2) Contents.--In issuing regulations under paragraph (1),
the Securities and Exchange Commission shall ensure that each
disclosure required under those regulations is--
(A) uniform for all covered issuers; and
(B) made in a manner that--
(i) maintains accuracy; and
(ii) reduces the unauthorized disclosure of
information.
(c) Sale of Subject Securities.--
(1) Prohibitions.--Except as provided in paragraph (2), no
covered person may sell or transfer, or divest an economic
interest in, any subject security with respect to the covered
person, if--
(A) during the preceding 1-year period, the
applicable covered issuer was required to make a
disclosure pursuant to the regulations issued under
subsection (b); or
(B) fewer than 3 years have elapsed since the
covered person was granted the subject security.
(2) Exceptions.--The prohibition under paragraph (1) shall
not apply with respect to any of the following:
(A) Any subject security sold or transferred by a
covered person in connection with a change of control
with respect to the applicable covered issuer,
including an affiliate of that covered issuer.
(B) Any subject security sold or transferred by a
covered person through--
(i) a will; or
(ii) the laws of descent or distribution.
(C) Any subject security that a covered person owns
or beneficially owns, as of the day before the date of
enactment of this Act.
(D) Any subject security awarded to the applicable
covered person that is immediately withheld by the
covered issuer and sold solely for the purposes of
meeting a tax obligation of the covered person with
respect to the receipt of the subject security.
(E) Any sale or transfer--
(i) which is made on or after the death of
the covered person;
(ii) which is made on or after the date on
which the covered person becomes disabled
(within the meaning of section 72(m)(7) of the
Internal Revenue Code of 1986);
(iii) which is made pursuant to a domestic
relations order in settlement of marital
property rights;
(iv) to the extent the aggregate of such
sales and transfers during any taxable year of
the covered person does not exceed the
qualified higher education expenses (as defined
in section 72(t)(7) of such Code) of the
covered person for such taxable year;
(v) to the extent the proceeds of such sale
or transfer are used by the covered person in
the time and manner described in section
72(t)(8) of such Code to pay qualified
acquisition costs described in such section,
subject to the rules of such section including
the limitation of subparagraph (B) thereof; or
(vi) to the extent the aggregate of such
sales and transfers during any taxable year of
the covered person does not exceed the amount
allowable as a deduction under section 213 of
such Code to the covered person for amounts
paid during such taxable year for medical care
(determined without regard to whether the
covered person itemizes deductions for such
taxable year).
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