SEC Clawback Rule Requires Focused, Coordinated Compliance

The threat of clawbacks may be a tool to keep executives in line, but clawbacks prompted by a new SEC rule on erroneously awarded compensation require separate treatment from ones related to misconduct. While happening in parallel with a DOJ program on recovering compensation from executives culpable of wrongdoing, and envisioning similar mechanisms, the SEC rule needs to be addressed on its own terms. The SEC requirement, pertaining to the 2010 Dodd-Frank Act, is now being implemented. With the timeline being updated in June, December 1, 2023, was revealed as the date when companies must have relevant policies in place. In a webinar, Davis Polk partners discussed how companies should meet this goal. This article distills their insights. See “DOJ’s Pilot Program on Clawbacks to Foster Individual Accountability Poses Challenges for Companies” (Mar. 29, 2023).

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