SEC Adopts Final Rules On Executive Compensation Clawbacks

On October 26, 2022, the US Securities and Exchange Commission (SEC) adopted Rule 10D-1 and other rule amendments (Final Rules) as required by Section 10D of the Securities Exchange Act of 1934 (Exchange Act).¹ The Final Rules require national securities exchanges to adopt listing standards under which issuers must implement (and enforce) policies that require the clawback of incentive-based compensation received by any current or former executive officer during the three completed fiscal years immediately preceding the date of a required restatement of an issuer's filed financial statements due to the issuer's material noncompliance with any financial reporting requirement under the securities laws. The Final Rules also affect related disclosure items, including the disclosure of executive compensation under Item 402 of Regulation S-K.