In October, Institutional Shareholder Services (“ISS”) released an off-cycle update to its Executive Compensation Policies Frequently Asked Questions (the “FAQs”), which are available at this link: US-Compensation-Policies-FAQ.pdf (the new questions are highlighted in yellow). As described in more detail below, the updates to the FAQs address ISS’s criteria for recognizing “robust” clawback policies and realizable
Dodd-Frank
Dodd-Frank Clawback Policy: Additional Action Required for NYSE-Listed Companies by December 31, 2023
Public companies nationwide have spent their summer and fall compensation seasons finalizing compensation clawback policies ahead of the December 1, 2023 deadlines set by the New York Stock Exchange (the “NYSE”) and the Nasdaq Global Market (“Nasdaq”), as applicable, as mandated by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of…
Possible Extension of Clawback Rule Effectiveness is Welcome Development for Issuers
Issuers that have been scrambling to prepare their boards and executives for accelerated implementation of compliant Dodd-Frank clawback policies will be glad to hear that the NYSE and Nasdaq have filed amendments to their proposed clawback rules to extend the effective date that would apply if the proposals are approved until October 2, 2023. If approved, the amendments would give listed companies until December 1, 2023 (60 days after the effective date of the rules) to adopt a compliant Dodd-Frank clawback policy.
“Clawback Comeback”: DOJ’s New Focus on Clawbacks to Prevent Corporate Crime
In September 2022, Deputy Attorney General Lisa Monaco delivered remarks unveiling the Department of Justice’s revised corporate crime guidance to “prioritize and prosecute corporate crime.” She reiterated that the number one priority for the DOJ is “individual accountability.” To that end, Monaco emphasized that the DOJ will “reward” companies that claw back compensation from executives…