Tag: clawback rule

Is it Groundhog Day? SEC reopens comment period for clawback proposal

Yesterday, the SEC announced that it is reopening the comment period for its 2015 proposal for listing standards for recovery of erroneously awarded compensation.  Wait—didn’t they just do that? Yes, in October 2021. (See this PubCo post.) But no, that’s not Sonny and Cher on the radio.  The SEC has decided to reopen the comment period AGAIN to allow further public comment in light of a new, just released DERA staff memorandum containing “additional analysis and  data on compensation recovery policies and accounting restatements.” The new comment period will be open until 30 days after publication of the reopening notice in the Federal Register.

SEC revisits 2015 Dodd-Frank clawback proposal—opens public comment period

It’s time to dig back into your mental archives for 2015.  That’s when the SEC, by a vote of three to two, initially proposed rules to implement Section 954 of Dodd-Frank, the clawback provision. But the proposal was relegated to the SEC’s long-term agenda and never heard from again.  Until, that is, the topic found a spot on the SEC’s short-term agenda this spring (see this PubCo post) with a target date for a re-proposal of April 2022.  The SEC had scheduled an open meeting for Wednesday to consider re-opening the comment period, but instead cancelled the meeting and, on Thursday, simply posted a notice.  Here is the original 2015 Proposing Release and here is the new fact sheet. SEC Chair Gary Gensler said that, with re-opening of the comment period, he believed “we have an opportunity to strengthen the transparency and quality of corporate financial statements as well as the accountability of corporate executives to their investors.” The questions posed by the SEC in the notice (discussed below) give us some insight into where the SEC may be headed with the proposal. It’s worth noting that one possible change suggested by the questions is a potential expansion of the concept of “restatement” to include not only “reissuance” restatements (which involve a material error and an 8-K), but also “revision” restatements (or some version thereof).  The public comment period will remain open for 30 days following publication of the release in the Federal Register.