Conclusion One final suggestion is an alternative to clawbacks, namely, “holdbacks,” which are a pre-payout recovery mechanism. More or less, a holdback approach requires the executive’s incentive compensation award to be mandatorily credited to a deferred...
Recommendations for SEC Rules on Executive Clawback Provisions It is my recommendation that past incentive-based compensations be exempt from the Recovery Policy required in §954 of the Dodd-Frank Act if the awards occur before the effective date of the SEC’s...
Section 954(b) Disclosure and Adoption of Mandatory Recoupment Policies 954 (b) also requires, by rule, that publicly traded companies disclose the issuer’s policy on incentive-based compensation. This requirement attaches, specifically, in the event the issuer is...
Clawbacks: Recovery of Erroneously Awarded Compensation The countless scandals and crises of our financial system have revealed several flaws in our compensatory system for top executives that leave many wondering how is it possible for top leaders of a company to...
Executive Compensation at Financial Institutions One of the more interesting provisions in the realm of executive compensation is the disclosure and prohibition of “risky” incentive-based compensation. Section 956 mandates that Federal regulators must (1) require...
Broker Discretionary Voting The “voting” theme within Dodd-Frank’s executive compensation provisions continues with §957: Broker Discretionary Voting. The advent of this section effectively eliminates the practice of broker’s voting on behalf of the actual owner’s of...