New SEC "Claw Back" Rules

On July 1 2015, the Securities and Exchange Commission, by a 3-2 vote,  proposed  new rules requiring public companies to "claw back" executive compensation mistakenly awarded due to accounting errors. The proposed rules—10D-1 under the Securities Exchange Act of 1934—satisfy the last of the SEC's rulemaking obligations under the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The finalized rules will join Section 304 of the Sarbanes-Oxley Act and Item 402(b) of Regulation S-K, which already impose reporting and clawback requirements on certain executive officers for compensation received as a result of misconduct.
 
The SEC's latest attempt to regulate executive compensation paints with a broader brush than those that precede it. Not only would the rules require clawback from a much broader range of executive officers, they would also remove the requirement that, to trigger clawback, an accounting error must result from executive misconduct. The