TheCorporateCounsel.net

The latest issue of The Corporate Executive newsletter has been sent to the printer. It is also available now online to members of The CorporateCounsel.net who subscribe to the electronic format. In this issue, Dave takes a deep dive into clawbacks with an article titled “Clawback 2.0: What’s Next for Compensation Recovery Policies?” Here’s an excerpt from Dave’s discussion of implementation considerations for Exchange-compliant clawback policies:

In most cases, companies have tasked the compensation committee with board level oversight of the clawback policy, and compensation committee charters should be revised to clearly identify this responsibility. Even though the terms of the clawback policy are fixed by Rule 10D-1 and the relevant exchange’s listing standards, it is advisable to review the clawback policy at least once a year to determine whether any regulatory or other developments would require any revisions to the policy.

A key consideration for companies and compensation committees going forward is the fact that many policies adopted in response to the exchange listing requirements left some matters for determination when a recovery analysis is required, and it may be appropriate to review those matters before a triggering event happens to determine how the company will respond in the event of a restatement.

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– John Jenkins