Executive-Bonus Clawbacks Get Long-Delayed Approval From SEC
- Pay to be returned if tied to firm’s financial reporting error
- Agency was required to write rule by 2010 Dodd-Frank Act
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Corporate executives will have to pay back bonuses based on mistakes in their businesses’ financial reporting under a new rule from the US Securities and Exchange Commission.
The SEC approved the long-stalled regulation, which was required by the 2010 Dodd-Frank Act, on Wednesday. The so-called clawback requirements are meant to hold corporate leaders accountable for the errors, whether they’re the result of fraud or simply mistakes.