The Securities and Exchange Commission (SEC) is poised to pass an executive compensation rule that would require public companies to claw back incentive-based compensation if their finances are restated within the previous three years.
The executive compensation clawback rule currently in effect for public companies is a rather narrow provision of the Sarbanes-Oxley Act of 2002. Firms are required to recover incentive-based compensation from executives only in cases of misconduct, limited to CEOs and CFOs, and only within one year.
