Checking The Box(es): SEC Issues New Guidance Clarifying Clawback Expectations

On April 11, 2025, the Staff of the SEC's Division of Corporation Finance released six Compliance and Disclosure Interpretations (“C&DIs”) that address the Form 10-K restatement checkboxes and related disclosures under Item 402(w)(2) of Regulation S-K. The new guidance provides public companies with more clarity regarding the disclosures associated with the recovery of erroneously awarded incentive-based compensation.

As a refresher, the SEC's clawback rules—which took effect in late 2023—require issuers listed on the New York Stock Exchange and NASDAQ to adopt policies to recover or “claw back” incentive-based compensation erroneously received by current or former executive officers following an accounting restatement.