SEC Proposes Broad Executive Compensation Clawback Rules in Connection with Accounting Restatements

Today, Pillsbury attorneys Jon Russo, Peter Hunt and Matthew Kane, and summer associate Royce Liu published their client alert titled SEC Proposes Broad Executive Compensation Clawback Rules in Connection with Accounting Restatements. The Alert discusses the SEC’s proposed recovery provisions that would apply on a no-fault basis to executive officers of virtually all exchange-listed companies who received incentive-based compensation during the 3 fiscal years preceding an accounting restatement to correct a material error. The Alert encourages issuers to consider how the proposed rules may affect their executive compensation policies and plans, clawback policies, employment agreements and indemnification arrangements.