SEC Revives Executive Compensation Clawback Rule
Last month, the SEC announced it is reopening the comment period for its proposed clawback policy regarding erroneously awarded incentive compensation. The comment period is expected to close in mid-November and the SEC will then review comments before publishing a final rule. Although the rule is unlikely to be effective in 2021, effectiveness in 2022 is certainly a possibility. It’s a good idea for companies to evaluate whether they will be subject to the clawback rule and if so, take actions to avoid potential pitfalls.
This article from Davis Polk & Wardwell provides more details and background information regarding the original rule proposed in 2015, as well as specific action steps companies can take as we move closer to the finalization of the rule.