The Advisors' Blog

This blog features wisdom from respected compensation consultants and lawyers

September 4, 2024

Dodd-Frank Clawbacks: Early Comment Letters Show Staff Scrutiny

Meredith blogged last week about early disclosures about Dodd-Frank clawback policies – and about recommended steps for the clawback review process. We’re also starting to see Corp Fin comment letters on this topic. Here’s a comment from July that was issued after a company filed a Form 10-K/A to restate financials:

We note that in 2023 your executive officers received bonuses based on the achievement of key performance indicators as determined by your board of directors. We also note the statement that you performed a recovery analysis and determined there was no incentive-based compensation tied to financial performance for any of our executive officers during the relevant recovery period. Please briefly explain to us why the application of the recovery policy resulted in this conclusion. See Item 402(w)(2) of Regulation S-K.

Although comment letters are always situation-specific, this suggests that the Staff is taking a close look at what companies say about application of their policies. To get practical guidance on this complex situation, make sure to join us next month at the “Proxy Disclosure & 21st Annual Executive Compensation Conferences.” Compensia’s Mark Borges, Ropes & Gray’s Renata Ferrari, Davis Polk’s Kyoko Takahashi Lin, and Gibson Dunn’s Ron Mueller will discuss “lessons learned” from clawback disclosures and comment letters to-date (and more). Here’s the full agenda for all of the topics we’ll cover over the course of 2 days.

Time is running out to register! You can do so online or by calling 800-737-1271. You can join us in person in San Francisco or attend virtually, and with either format, you’ll have access to on-demand replays for a fully year after the event. That’s incredibly valuable, because it means you can go back to listen to critical guidance as situations arise.

Liz Dunshee