The Advisors' Blog

This blog features wisdom from respected compensation consultants and lawyers

February 3, 2022

Clawback Proposal: Notable Comments

Comments on the SEC’s reopened “clawbacks” proposal were due at the end of November. As usual, though, the SEC has continued to welcome submissions even after that deadline, and letters have continued to roll in as recently as last week. You can view all of the comments submitted – from 2015 to present – on the SEC’s website. Here are a few notable ones:

ABA Business Law Section

NYSE Group (commenting on the delisting standards that exchanges would apply in determining whether an issuer has complied with its recovery policy and advocating for Exchange staff discretion)

As You Sow

Hunton Andrews Kurth

Davis Polk

US Chamber

NYC Comptroller

Business Roundtable


Sullivan & Cromwell

Many of the comments reiterate concerns that were previously raised in response to the 2015 proposal. Not surprisingly, investors are general supportive of broader corporate clawback policies, and issuers are advocating for more bright-line tests that are tied to financial statement materiality. The Davis Polk letter also discusses issuer compliance costs and the potential impact on executive compensation arrangements. There are differences of opinion on some points – e.g. whether to include a Form 10-K cover page checkbox – even amongst the issuer community. The Staff certainly has a lot to consider as it moves towards finalizing this rule.

Liz Dunshee