Yesterday, the SEC proposed the long-awaited executive
compensation clawback rules under Section 954 of the Dodd Frank
Act. Weighing in at over 100 pages, there is a lot to digest.
This McGuireWoods client alert provides an in-depth
summary, and includes some suggestions for what companies should be
considering now that the proposed rules are finally out:
Consider New Arrangements. Companies should consider
adding provisions to any newly entered incentive compensation
arrangement that would subject the compensation payable under the
arrangement to any clawback policy that may be adopted by the
company in the future.
Consider Existing Arrangements. With respect to
existing arrangements, the proposed rules state that clawback
policies would need to apply to any incentive compensation received
with respect to a fiscal period ending on or after the effective
date of the proposal, including compensation payable pursuant to
pre-existing arrangements. In addition, the
