Executive Compensation Alert: SEC Proposes "Clawback" Rules For Executive Compensation

On July 1, 2015, the Securities and Exchange Commission (the "SEC") proposed rules directing the national securities exchanges (NYSE, NASDAQ, etc.) to create listing standards requiring listed companies to implement policies that obligate a listed company to recover or "claw back" incentive-based compensation received by its executive officers as a result of materially incorrect financial statements. These proposed rules are mandated by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and are the last of the compensation-related rules required by the Dodd-Frank Act.

Highlights of Proposed Rules

• A "clawback" under the proposed rules would be mandatory in the event a company is required to restate a financial statement to correct material non-compliance with a financial reporting requirement. A "clawback policy" would require the company to recover excess "incentive-based compensation" received by its current and former