Long Time Coming: SEC Adopts Final Dodd-Frank Clawback Rules

Twelve years after the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and many years after the Securities and Exchange Commission started considering regulations implementing the clawback provisions of Dodd-Frank, the SEC published the Final "Clawback" Rules (the "Final Rules") on October 26, 2022. The Final Rules task national securities exchanges ("exchanges") with adopting formal listing standards that, in turn, require publicly listed companies to establish compensation clawback policies that meet the standards prescribed in the Final Rules.

As discussed below, the Final Rules impose (i) substantive standards for identifying and calculating "erroneously paid" incentive compensation subject to clawback and (ii) a series of procedural steps to be taken, and disclosures to be made, in implementing the new clawback regimen and protocols.