The Congressional Research Service (“CRS”) identified legislative policy options in light of news that executives of Silicon Valley Bank (“SVB”) reaped “significant financial rewards” before the bank’s failure.In a “Legal Sidebar,” CRS explained that, under the Federal Deposit Insurance Act (“FDIA”), executives of insured depository institutions are subject to restrictions on compensation that is “excessive”…
Tag: clawbacks
DOJ Announces New Clawback Policies at the American Bar Association National Institute on White Collar Crime
The Justice Department has a new policy “to shift the burden of corporate malfeasance away from uninvolved shareholders onto those more directly responsible.” Deputy Attorney General Lisa Monaco announced a pilot program that will (1) make sure every corporate resolution involving the Criminal Division will include a requirement that the resolving company develop compliance-promoting criteria…
SEC Adopts Final Rule 10D-1 Regarding Clawbacks Of Executive Compensation
On October 26, 2022, the Securities and Exchange Commission (“SEC”) adopted Rule 10D-1 entitled “Listing Standards for Recovery of Erroneously Awarded Compensation.” The rule has two main requirements. First, it directs national securities exchanges to require listed issuers to develop and implement written policies to claw back incentive-based executive compensation if the issuer is later…
Agenda – SEC’s Clawback Rule Could Change Compensation Structures
After years of anticipation from corporations, institutional investors and better-business advocates, the Securities & Exchange Commission adopted its final clawback rule this week requiring companies to recover erroneously awarded incentive-based compensation after making a financial restatement. The new rule will force companies to craft policies aligned with the SEC’s standards — and that also goes…
McDonald’s claws back $105m from disgraced former chief Steve Easterbrook | Financial Times
Steve Easterbrook, the former McDonald’s chief executive who was fired over a relationship with a subordinate, has forfeited more than $105m to settle one of corporate America’s most extraordinary executive pay battles. The burger chain on Thursday revealed Easterbrook’s return of awards, which far exceeded the $40m-plus severance package he was granted on his exit…
Agenda – Boards Sharpen Tools to Circumvent ‘Ugly’ Clawback Process
In an attempt to sharpen the tools available to boards in the wake of a scandal, companies are amending otherwise standard clawback provisions or looking beyond clawbacks altogether. Indeed, following the MeToo movement, policies were expanded to include for-cause termination, misconduct and, in rare cases, sexual misconduct, as Agenda has reported. That trend has continued,…
Clawbacks Are Hard, So Companies Try Postponing Pay Instead – WSJ
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…
Compensation Clawbacks: Trends and Lessons Learned | Foley & Lardner LLP – JDSupra
Executive compensation clawback policies continue to grow in popularity. Although the Securities and Exchange Commission (SEC) has not yet finalized its rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) that will require publicly-traded companies to adopt compensation recovery policies, many companies have now voluntarily adopted clawback policies. More than 90 of…
Hertz (HTZ) Seeks $70M in Clawbacks Tied to Accounting Scandal – Bloomberg
Hertz Global Holdings Inc. is demanding that ex-Chief Executive Officer Mark Frissora and other former senior managers return at least $70 million of incentive compensation for their roles in an accounting scandal five years ago. Mark FrissoraPhotographer: Andrew Harrer/Bloomberg The car-rental chain accused the former executives of pressuring employees to use fraudulent accounting techniques to…
Reckitt boss ‘should repay bonus’ over opioid deal | Business | The Times
Senior executives of Reckitt Benckiser face pressure to return lucrative bonuses after it agreed to pay $1.4 billion to resolve long-running US investigations into the sales and marketing of a treatment for opioid addiction. Source: Reckitt boss ‘should repay bonus’ over opioid deal | Business | The Times
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