October 15, 2021
Clawbacks: SEC Reopens Comment Period!
The writing was on the wall when the SEC scheduled and then cancelled this week’s open meeting. Yesterday, without a meeting, the Commission announced that it was re-opening the comment period on the 2015 “clawbacks” proposal – which would – at a very high level – direct the stock exchanges to require listed companies to implement policies to recover incentive-based pay in the event of an accounting restatement. The fact sheet that accompanied yesterday’s announcement notes:
The Commission received numerous comment letters on the 2015 proposal. In light of the regulatory and market developments since 2015, the Commission is providing the public the opportunity to submit additional comments on the 2015 proposal, and to address the additional questions raised in the reopening release issued today.
The 19-page “reopening release” points out that the SEC will consider comments that have been received to-date on the proposed rule. The agency is also seeking feedback on 10 specific additional topics, based on its consideration of the prior proposal and new things that have happened in the past half-decade (e.g., many companies have now adopted clawback policies that may or may not align with the proposed rule). SEC Chair Gary Gensler released this short statement in support of the decision to re-open the comment period.
The comment period will be open for 30 days from the date the re-opening release is published in the Federal Register. We will be talking about this breaking news at our “Executive Compensation Conference” today!
– Liz Dunshee