Corporate Governance Update: Corporate "Clawback" Provisions
July 21, 2008
An increasing number of companies have adopted provisions allowing them to recover executive pay that has been awarded based upon financial statements that are subsequently restated. A recent study found that 246 of 2,121 companies reviewed incorporated this type of recoupment ("clawback") policy as part of their executive compensation programs. This is a large increase over the 2003 figures, which indicated only fourteen of 1,800 companies had such provisions.