We suppose this is a step in the right direction, though we’d rather see restrictions on selling vested stock until three years after leaving the company.

Companies are withholding more of their top officers’ pay for longer, hoping to avoid the hassle of recouping money when—or if—executives are later found responsible for misconduct.

The changes build on clawback provisions that have become widespread in compensation agreements, and are a recognition by companies that retaining unpaid compensation is easier than trying to recover it once it is in an executive’s hands.

When it comes to compensation, “the most effective way to recoup it is to never give it out to begin with,” said Charles Elson, a University of Delaware finance professor who helped a consortium of investors and health-care companies hammer out new pay-deferral guidelines. “The principle is that [executives] cannot benefit from improper conduct.”

Pharmaceutical manufacturer Bristol-Myers Squibb Co. is requiring executives to hold three-quarters of their equity grants for at least a year after the awards vest, or become fully the executive’s. Drugstore chains Walgreens Boots Alliance Inc. and CVS Health Corp. have made misconduct a factor that lets companies revoke deferred pay. CVS also is holding back some pay even after an executive leaves the company.

Clawbacks Are Hard, So Companies Try Postponing Pay Instead – WSJ