The Securities and Exchange Commission is gearing up to finalize rules for clawbacks, which means that incentives that have been awarded to executives will have to be returned if errors or misconduct occurs. Currently only the CEO and CFO of public companies are subjected to clawback requirements. While many companies have already put in place clawback rules for executives, the SEC intends to enforce the rules to cover all executives across a company that engages in illegal activity or misconduct.
According to the SEC, the agency will meet on Wednesday to consider amendments to Dodd-Frank’s clawback provision and will require that the national securities exchanges and associations “prohibit the listing of any security of an issuer that is not in compliance” with clawback requirements.
