Just back from another excellent CompensationStandards.com/NASPP
Annual Conference. Among the many new and interesting topics
explored was an issue related to compensation clawbacks, which
recently has been thrust into prominence. The issue whether a
company's indemnification provisions would require it to
reimburse a covered executive for (i) compensation amounts clawed
back and/or (ii) the costs of defending against the company's
lawsuit against the executive attempting to clawback the
compensation.
In one ongoing case, after the company filed a lawsuit seeking a
clawback, the former corporate officers responded by seeking
advancement of legal fees and indemnification. The company's
bylaws provide that legal fees are advanced to former corporate
officers when a claim related to actions taken in their official
corporate capacity is brought. The company's compensation
clawback provision was silent on the matter of advancement of
fees.
