Clawbacks are back in the news. Focus on executive compensation practices continues to sharpen and few aspects have attracted more attention than clawbacks. However, a clawback policy is an instrument that must be understood properly in order to be used effectively. Moreover, as the responsibility for enforcement of executive compensation clawbacks will lie in the hands of boards and compensation committees, they have to be prepared to exercise their authority appropriately. Questions regarding intent, design and implementation should all be considered in light of a company’s particular circumstances when developing a clawback policy. Importantly, however, consideration should also be given to the most probable questions that will arise when a company is faced with a clawback decision.
Listen to Scott P. Spector of Fenwick & West LLP, David M. Lynn of Jenner & Block LLP and Mary E. Alcock of Cleary Gottlieb Steen & Hamilton LLP for a discussion of this ever current topic, including:
- Where does the compensation committee's authority to clawback come from?
- What litigation risks will the Company be exposed to?
- How does the Company best plan for and manage stockholder and public reactions and perceptions?