July 17, 2018 Executive Compensation Executive & Director Pay Design Articles

Resource Library / Insights / Articles
Executive & Director Pay Design

Structuring Discretion for Clawbacks

The continuing stream of corporate wrongdoing and risk failures – at Wells Fargo & Co., Volkswagen AG, Equifax, Uber Technologies, Mylan, and others – gives new urgency to two questions:

  • Should boards have broader policies for triggering compensation adjustments, forfeitures, and repayment of past compensation – generally referred to as recoupments or clawbacks – when corporate harm is demonstrated?
  • How should boards exercise discretion when they implement such policies?

Regulators today require relatively narrow clawback policies, triggered mainly in the event of a restatement of financials. But a strong business case can be made that corporate harms of many kinds should qualify as triggers for clawbacks.

View the full article as it was originally published.

Seymour Burchman

Kathryn Neel

This article was originally published in NACD BoardTalk.

Related Insights

View Insight Collections

by Theme or Search