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...
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...
Curbing the “Golden Parachute” Under Dodd-Frank One attempt to curb incentive conflicts has been the “golden parachute” This device allows for pre-set compensation amounts if/when the manager leaves the corporation. The concept behind this device was that, because...
