On November 28, 2022, the Securities and Exchange Commission (the “SEC”) published the final clawback rules (the “Final Rules”) under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) in the Federal Register.

Now that the Final Rules have been published in the Federal Register, issuers should be aware of the following key deadlines[1]:

  • January 27, 2023: The Final Rules become formally effective (60 days after the Final Rules were published in the Federal Register).
  • February 24, 2023: Outside date for national securities exchanges (“exchanges”) to file proposed listing standards that comply with the Final Rules (this is the last business day before the 90th day post-publication window closes on February 26, 2023).
  • November 28, 2023: Outside date for the exchanges’ listing standards to become effective.
    • On the date that exchanges’ listing standards become effective all incentive-based compensation “received” (as defined in the Final Rules) by executive officers on or after this date must be subject to a compliant clawback policy.
    • Disclosures required by Final Rules must be included in all applicable SEC filings required on or after this date.
  • 60 days after listing standards become effective (latest date: January 27, 2024): Outside date for issuers to adopt compliant clawback policy.

The Final Rules were adopted on October 26, 2022, and we discuss the detailed requirements of the Final Rules and related practical considerations in our earlier blog post. We also discuss the interaction of the Final Rules and the DOJ clawback guidance in this blog post and this Law360 Article.

Proskauer’s Employee Benefits and Executive Compensation team is advising issuers on implementation of new clawback policies and updating existing clawback policies to comply with the listing standards as they are finalized. Please contact a member of the team with questions.

[1]  Please note that some of the date references are to “outside” dates (i.e. the latest possible date) and the timetable could be accelerated depending on exactly when the exchanges and SEC take action, so issuers should continue to monitor developments.

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Photo of Michael Album Michael Album

Michael J. Album is a partner in the Employee Benefits & Executive Compensation Group, and represents companies and compensation committees, private equity firms and hedge funds, and CEOs, senior executives (in numerous business sectors) and portfolio managers on a full range of executive…

Michael J. Album is a partner in the Employee Benefits & Executive Compensation Group, and represents companies and compensation committees, private equity firms and hedge funds, and CEOs, senior executives (in numerous business sectors) and portfolio managers on a full range of executive compensation matters. As part of his practice he has represented management teams in numerous management buy-outs (including in the health care, retail and asset management sectors) and has represented “founders” and partners in a variety of businesses on restructuring and “business divorce” matters.

Michael also is a member of the Restrictive Covenants, Trade Secrets & Unfair Competition, which is an interdisciplinary group at Proskauer that represents clients on non-compete, trade secret and intellectual property matters.

Michael has written and spoken extensively in the area of executive compensation. He has contributed to the NCEO publication Selected Issues in Equity Compensation (2019 Edition) and Dow Jones Private Equity Analyst – Global Compensation Study, and his articles on MBO compensation have been featured in two publications (Private Equity Mathematics and Human Capital in Private Equity).

His other articles have appeared in The Business LawyerBloombergNew York Law JournalEmployment Relations Today, and Venture Capital Review and he has been a featured speaker on executive compensation developments at ALI-ABA, Dow Jones Private Equity and other webinars and seminars.

In addition, Michael has served on the Board of Directors of the Yale Law School Fund, and as co-Chairman of his Reunion Class Campaign for the Yale Law School Fund.

Photo of Colleen Hart Colleen Hart

Colleen Hart is a partner in the Tax Department and a member of the Employee Benefits & Executive Compensation Group.

Colleen advises companies, executives and boards on complex executive compensation matters. She offers a multidisciplinary approach to compensation and benefits issues with a…

Colleen Hart is a partner in the Tax Department and a member of the Employee Benefits & Executive Compensation Group.

Colleen advises companies, executives and boards on complex executive compensation matters. She offers a multidisciplinary approach to compensation and benefits issues with a focus on tax planning, securities laws and corporate governance. Matters she handles include the negotiation, structuring and implementation of employment and change-in-control agreements and deferred compensation, equity and incentive compensation plans. She advises on golden parachute and deduction limitation rules, securities reporting, registration and disclosure requirements and California employment laws. In addition, Colleen has extensive experience advising clients on compensation and benefits issues arising in mergers and acquisitions, initial public offerings, bankruptcies and finance transactions.

Colleen is a contributing author of The 409A Handbook (BNA 2016) and lectures frequently on executive compensation matters. As a U.S. Navy veteran, Colleen devotes a substantial amount of time to organizations that provide legal and support services to U.S. veterans.

Photo of Kate Napalkova Kate Napalkova

Kate Napalkova is a partner in the Tax Department and a member of the Employee Benefits & Executive Compensation Group.

Kate advises public and private companies, private investment funds, executives and boards on a broad range of compensation and employee benefits matters. Kate’s…

Kate Napalkova is a partner in the Tax Department and a member of the Employee Benefits & Executive Compensation Group.

Kate advises public and private companies, private investment funds, executives and boards on a broad range of compensation and employee benefits matters. Kate’s practice includes the compensation and employee benefits aspects of mergers and acquisitions, reorganizations, spin-offs, initial public offerings, financings and other corporate transactions. Kate’s practice further focuses on advising clients across various industries on the negotiation, structuring and implementation of benefits and compensation plans and executive compensation arrangements; golden parachutes; securities reporting, registration and disclosure compliance; and corporate governance matters.

While in law school, Kate served as the editor-in-chief of the Fordham International Law Journal.

Kate is fluent in Russian.

Photo of Andrea Rattner Andrea Rattner

Andrea S. Rattner is a partner in the Tax Department and member of the Employee Benefits & Executive Compensation Group. For more than 30 years, her practice has focused on a broad range of executive compensation and employee benefits matters, advising clients on…

Andrea S. Rattner is a partner in the Tax Department and member of the Employee Benefits & Executive Compensation Group. For more than 30 years, her practice has focused on a broad range of executive compensation and employee benefits matters, advising clients on an ongoing basis as well as in the context of corporate transactions and other transformative and unique situations. Her clients include public and private companies, boards of directors, compensation committees and senior executives in a broad range of industries. Andrea has been involved in Firm management for many years, having served as a member of the Executive Committee and a former chair of the Tax Department.

Andrea counsels clients with respect to the tax, securities, corporate governance, stock exchange, ERISA and other implications affecting executive compensation arrangements. Andrea regularly provides advice regarding equity arrangements (such as stock options, restricted stock, RSUs, LLC/partnership interests and phantom equity), employment agreements, change-in-control agreements and all other types of compensation arrangements (including incentive awards, SERPs, deferred compensation and “409A” covered and exempt arrangements).

She counsels clients on benefits and compensation matters arising in all types of corporate transactions, including mergers & acquisitions, spin-offs, restructurings, joint ventures, debt and equity offerings and bankruptcies. In numerous transactions, she has addressed the treatment of stock options and other equity awards, change-in-control and “golden parachute” tax issues, severance obligations and separation agreements, the negotiation of new employment agreements and other executive arrangements, retention and other bonus plans, benefit plan liabilities, COBRA, PBGC-related issues and post-closing benefit plan and compensation structures and integration.

Andrea also advises clients on compliance with ERISA, the Internal Revenue Code, and other laws affecting employee benefit plans, as well as plan design, administration, termination, fiduciary duty issues, prohibited transactions, qualification requirements and other matters concerning pension, profit-sharing, employee stock ownership, 401(k), and other types of plans. She has extensive experience with respect to the legal consequences relating to the use of employer stock in tax-qualified plans such as ESOPs, profit-sharing, stock bonus and pension plans.

Andrea has been lauded by various legal rankings directories, including Chambers USA and Legal 500, noting that her “depth of knowledge and involvement in this practice area, [including] the business and trends, is terrific.” She is also recognized for having an “excellent understanding of the business community” and for being “pro-active in keeping clients up to date.” She writes and lectures frequently on employee benefits and executive compensation matters and is a co-editor and chapter author of Executive Compensation (Law Journal Press). Since 1993, she has served as an adjunct professor on the faculty of Cornell University (New York State School of Industrial & Labor Relations-Management Programs). Andrea is also active in Proskauer’s relationship with the Women Corporate Directors (WCD), the only global membership organization of its kind focused on helping women obtain and succeed in board positions.

Photo of Seth Safra Seth Safra

Seth J. Safra is chair of Proskauer’s Employee Benefits & Executive Compensation Group. Described by clients as “extremely knowledgeable, practical, and strategic,” Seth advises clients on compensation and benefit programs.

Seth’s experience covers a broad range of retirement plan designs, from traditional defined…

Seth J. Safra is chair of Proskauer’s Employee Benefits & Executive Compensation Group. Described by clients as “extremely knowledgeable, practical, and strategic,” Seth advises clients on compensation and benefit programs.

Seth’s experience covers a broad range of retirement plan designs, from traditional defined benefit to cash balance and floor-offset arrangements, ESOPs and 401(k) plans—often coordinating qualified and non-qualified arrangements. He also advises tax-exempt and governmental employers on 403(b) and 457 arrangements, as well as innovative new plan designs; and he advises on ERISA compliance for investments.

On the health and welfare side, Seth helps employers provide benefits that are cost-effective and competitive. He advises on plan design, including consumer-driven health plans with HSAs, retiree medical, fringe benefits, and severance programs, ERISA preemption, and tax and other compliance issues, such as nondiscrimination and cafeteria plan rules.

Seth also advises for-profit and non-profit employers, compensation committees, and boards on executive employment, deferred compensation, change in control, and equity and other incentive arrangements. In addition, he advises on compensation and benefits in corporate transactions.

Seth represents clients before the Department of Labor, IRS and other government agencies.

Seth has been recognized by Chambers USA, The Legal 500, Best Lawyers, Law360, Human Resource Executive, Lawdragon and Super Lawyers.

Photo of David Teigman David Teigman

David Teigman is a partner in the Tax Department and a member of the Employee Benefits & Executive Compensation Group. David focuses his practice on executive compensation and benefit matters, principally in connection with mergers and acquisitions, securities offerings and senior executive employment…

David Teigman is a partner in the Tax Department and a member of the Employee Benefits & Executive Compensation Group. David focuses his practice on executive compensation and benefit matters, principally in connection with mergers and acquisitions, securities offerings and senior executive employment relationships.

David regularly counsels public and private companies on compensatory and benefit arrangements, such as equity-based incentives, cash-based incentives and employment, change-in-control, retention, separation and consulting agreements. He also advises on corporate governance, tax law and securities law related to employment matters.

A frequent author, David has published the following articles:

  • “Share Reserve and Other Limits in Public Company Equity Plans” (Practical Law)
  • “Roadmap to Providing Appropriate Incentives to Employees When Your Company is Going to be Sold” (The M&A Lawyer)
  • “Taxation of an Option Exercise When the Shares are Subject to a Substantial Risk of Forfeiture” (Practical Law)

David is often called upon by leading industry publications, including Agenda/Financial Times, Law360 and Modern Healthcare, for his perspective on executive compensation and benefit issues.

David received his J.D., cum laude, from the University of Buffalo, where he was the Editor-in-Chief of the Buffalo Law Review and the Executive Editor of the Public Interest Law Journal, and his B.S. from Cornell University.

Photo of Heather Monte Heather Monte

Heather Monte is an associate in the Tax and a member of the Employee Benefit and Executive Compensation Group.