DOJ's Pilot Program Regarding Compensation Incentives And Clawbacks

Key Takeaways

• On March 3, 2023, Kenneth A. Polite, Jr., the Assistant Attorney General ("AAG") of the Criminal Division of the U.S. Department of Justice ("DOJ"), announced the launch of the Division's Pilot Program on Compensation Incentives and Clawbacks ("Pilot Program").
• Under the Pilot Program, DOJ (1) will reduce criminal fines if companies make good faith attempts to claw back compensation from employees who engaged in wrongdoing, even if those efforts are unsuccessful, and (2) will require companies entering into criminal resolutions to implement compensation-related measures as part of their enhanced compliance commitments.
• Given the complexity of executive compensation packages, implementing DOJ's expectations will likely be challenging and will require careful consideration.