Week InAdvance: June 29, 2015
The SEC is set to propose requiring recovery, or clawback, of incentive compensation from executives in cases when erroneous financial results have to be restated. Commissioners are scheduled to meet on Wednesday to weigh a Dodd-Frank Act directive that the agency compel firms to take back pay "in excess of" what should have been paid under an accounting restatement, if such a restatement is required because of "material noncompliance" with securities laws. Dodd-Frank required the SEC to write rules on CEO pay ratios, pay for performance and employee hedging as well as clawbacks. The agency already has proposed the pay ratio, hedging and pay-for-performance rules.
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