Securities
Jan. 27, 2025
Clawbacks: Grabbing more than the basics
New SEC rules require companies to adopt clawback policies for executive compensation, but many firms are going beyond the mandates, implementing discretionary policies to address broader risks, align with shareholder expectations, and deter misconduct while navigating evolving regulatory and investor pressures.
Allison C. Handy
Partner
Perkins Coie LLP
Securities and Exchange Commission rules approved in 2022 obligated national stock exchanges to adopt listing standards requiring that companies have policies to recoup, or claw back, erroneously awarded incentive compensation from company executives. These rules implement a requirement of the Dodd-Frank Act of 2010. In accordance with these rules, stock exchange standards required companies to adopt compliant clawback policies no later than Dec. 1, 2023.
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