The board of directors of Prudential Financial this week announced the adoption of a new clawback policy covering all incentive-based compensation made to its executive officers in the form of stock options and other equity awards.
"The policy, which marks an expansion of Prudential’s previous clawback policy, was adopted by the board as part of its annual review of the company’s executive compensation programs, careful consideration of input from shareholders, and commitment to corporate governance best practices," the company stated.
Prudential’s previous clawback policy applied to a material restatement of its annual consolidated income and pertained solely to compensation awarded under the company’s book value award program. The new policy also enables the board to recover all or a portion of incentive-based compensation paid to an executive that engages in conduct that has had or could have a significant adverse reputational or economic impact on the company, its divisions, or any of its affiliates. In addition, all incentive-based compensation paid during the three-year period preceding the restatement or the occurrence of the improper conduct can be clawed back.
The policy requires the company to disclose to its shareholders by the time it files its subsequent proxy statement any actions the board takes or decides not to take to recoup compensation. A full copy of the expanded clawback policy is available here.
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