Issue link: https://digital.shearman.com/i/1512772
Shearman & Sterling LLP 99 | Clawback Policies Triggers The triggering requirement under a Dodd-Frank clawback policy requiring recovery of incentive compensation is a financial restatement, but the restatement does not have to be the result of fraud or misconduct. Almost half of the Top 100 Companies currently have a voluntary clawback policy that requires fraud or misconduct to trigger recovery. require fraud or misconduct related to the financial restatement do not require fraud or misconduct Triggers at the Top 100 Companies Include* *Some policies of the Top 100 Companies use multiple triggering events. 3 6 33 78 Financial restatement Fraud or misconduct (no restatement required) Materially inaccurate financial statements (no restatement required) of the Top 100 Companies expressly disclose that they maintain a financial-related clawback policy 94 48 30 On June 9, 2023, the SEC approved the NYSE's and Nasdaq's proposed Dodd-Frank Act clawback listing standards. In accordance with the finalized rule, companies will have until December 1, 2023 to adopt Dodd-Frank-compliant clawback policies. Many Top 100 Companies voluntarily maintain clawback policies as a best practice. Their policies, however, are not uniform and do not comply with the new listing standard. We expect most companies to maintain their existing clawback policy and adopt a new, standalone "Dodd-Frank clawback policy" that conforms with the NYSE and Nasdaq listing standards. Data Clawback Policies