New Comment Deadline Set for SEC Proposal on Listing Standards for Clawbacks

The SEC reopened the comment period for a proposal that would establish listing standards for clawback policies of erroneously awarded compensation. Comments are now due by July 14, 2022. The notice was published in the Federal Register.

The comment period was reopened to allow interested persons to respond to the additional analysis and data on compensation recovery policies and accounting restatements contained in a staff memorandum that was added to the public comment file on June 8, 2022.

As previously covered, the 2015 SEC proposal would (i) require listed companies to develop recovery policies that would clawback any incentive-based compensation awarded to current or former executive officers in the event of accounting restatements; (ii) define "executive officer," noting that its definition will differ from the already defined "officer"; and (iii) require that a public company include a copy of its compensation recovery policy in its annual report.