See Katten's Model Clawback Policy As Mandatory Rules Take Effect

As we previously noted, the Securities and Exchange Commission (SEC) adopted long-delayed rules on October 26, 2022, which will require companies to implement mandatory "clawback" policies with respect to incentive-based compensation if the company's financial statements tied to achieving the relevant incentive payments are later required to be restated.

Since our initial alert, the New York Stock Exchange (NYSE) and Nasdaq Stock Market (Nasdaq) proposed listing standards that the SEC approved on June 9, 2023. Each exchange's applicable listing standards became effective on October 2, 2023. Issuers must adopt a clawback policy compliant with such listing standards no later than December 1, 2023.