| US clawback provisions on the rise |
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| Written by Adrie van der Luijt | |
| Thursday, 05 June 2008 | |
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US companies are introducing clawback provisions in increasing numbers.
The survey was published by The Corporate Library, an independent research firm that provides corporate governance information products, research services and data to a broad variety of clients including institutional investors, corporations, D&O liability insurers, law firms, accounting firms, executive search firms, academic institutions and the media. The report found that almost 300 of the more than 2,100 companies surveyed have adopted provisions to recover cash and stock incentives in cases where there have been misstated financials. “This is an enormous increase over the last time we looked at this issue in 2003, when we found just 14 companies with any kind of clawback or recoupment policy,” said Senior Research Associate Paul Hodgson, author of the report. Almost half of the companies with a clawback provision were found in the S&P 500, indicating that the adoption of a clawback policy is more than three times as common in larger companies. The report also discriminates between several different types of clawback policies, giving examples of each of them and discussing their relative effectiveness. Related articles
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