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Abstract: 

This article examines the U.S. Securities and Exchange Commission’s clawback rules adopted in October 2022, which require listed companies to recover erroneously awarded incentive-based compensation from both current and former executive officers following a financial restatement—regardless of fault or misconduct — and to meet related disclosure obligations. It analyzes the compliance challenges faced by non-U.S.-listed companies and U.S.-listed companies with global executives, especially where the clawback rules may conflict with home country laws. The article reviews the available exceptions to the clawback requirements and surveys the enforceability and limitations of these rules across multiple non-U.S. jurisdictions. It concludes by outlining practical strategies to enhance the enforceability of clawback policies for global executives within the complex, multijurisdictional landscape of executive compensation governance.

Keywords: Covered Executive Officers; Triggering Events; Disclosure Requirements; Enforceability; Recoveries

Affiliations:  1: Skadden, Arps, Slate, Meagher & Flom LLP; 2: Skadden, Arps; 3: Skadden, Arps.