SEC Adopts Bonus Clawback Rules

Howard E. Berkenblit was quoted in the article "SEC Adopts Bonus Clawback Rules," published by CFO Dive on October 26, 2022.

The Securities and Exchange Commission (SEC) Wednesday adopted new rules that will require publicly-listed companies to recover “erroneously” awarded incentive-based pay received by current or former executive officers during the three-year period preceding an accounting restatement due to “material noncompliance,” according to an SEC release.

While many companies voluntarily have their own clawback policies in place, the fact that the new regulations can be triggered by mistakes rather than fraud will be a change, Howard said. “Many restatements are not the result of fraud, they’re just mistakes so that will be an adjustment."