The SEC again reopened the comment period on July 13, 2022 for its proposal for Listing Standards for Recovery of Erroneously Awarded Compensation, more commonly known as clawback rules. The proposed rules would direct the national securities exchanges to establish listing standards that would:
- Require each issuer to develop and implement a policy providing for the recovery, or clawback, under certain circumstances (including accounting restatements due to material noncompliance with financial reporting requirements under applicable securities laws), of incentive-based compensation based on financial information required to be reported under the securities laws that is received by current or former executive officers; and
- Require disclosure of the policy. Clawback rules were originally proposed by the SEC in July 2015 as a result of the Dodd-Frank Act.
The Commission stated that the purpose of the extended comment period is to allow comment on the additional analysis and data on compensation recovery policies and accounting restatements contained in an SEC staff memorandum as of June 8, 2022.
