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In brief

On 26 October 2022, the SEC adopted final incentive compensation clawback rules requiring US-listed issuers to:

  • Develop and implement a policy for the recovery of incentive-based compensation that is erroneously “received” by current and former executive officers during the three completed fiscal years immediately preceding the date that the issuer is required to prepare an accounting restatement.
  • File that policy as an annual report exhibit and satisfy related disclosure obligations in accordance with SEC rules.

The rule, known as Rule 10D-1, directs national securities exchanges to establish listing standards in line with the final rule. Companies that fail to comply with the rule may be delisted.


Click here to access the full alert.

Author

Sinead Kelly is a partner in the Firm's Compensation practice. She advises on US executive compensation and global equity and has practiced in the compensation field for over 15 years. She regularly publishes articles and blogs on compensation-related topics, including in the Corporate Taxation Journal and Law 360, and is a contributing author to Lexis Practice Advisor and a founder of the Firm's Compensation Connection blog. She is also a frequent speaker on executive compensation and global equity topics, in venues including the National Association of Stock Plan Professionals, the Society for Corporate Governance, the Certified Equity Professional Symposium, the Global Equity Organization and the National Center for Employee Ownership. She has been recognized by Chambers USA for Employee Benefits and Executive Compensation where Chambers states that she is "fantastic and always provides comprehensive and timely advice."

Author

Roger Bivans is a seasoned lawyer focused on strategic transactions, including domestic and multinational mergers and acquisitions, carve-out and joint venture transactions, capital markets transactions, securities regulation and corporate governance matters and general commercial transactions. He is recognized by Chambers USA for Corporate/M&A. A frequent speaker on securities regulation, he is the current Dallas chapter president of the Society for Corporate Governance and moderator of the DFW Securities Law Discussion Group. Mr. Bivans previously served as a surface warfare officer in the United States Navy.

Author

Victor Flores is a partner in Baker McKenzie’s Employment & Compensation Practice, with a focus on Executive Compensation and Employee Benefits.

Author

Thomas Asmar has almost two decades of experience advising public and private companies, as well as private equity funds, on all employee benefits and compensation issues arising out of mergers, acquisitions, IPOs, financings and other corporate transactions.

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