Six Steps for Adhering to the SEC’s New Clawback Rule

Six Steps for Adhering to the SEC’s New Clawback Rule

A new SEC rule that toughens the clawback of executive pay deemed to have been awarded under false, misleading, or mistaken circumstances that results in a financial restatement goes into effect in the new year. While some companies have adopted their own clawback policies in anticipation of the rule, others have not—and all companies will need to ensure they’re in compliance with the SEC’s specific requirements as they head into 2023. In this Farient Brief, we break down the rule, its implications for directors and management, and provide six action steps directors should take now to comply with the new regulation.

About Farient Advisors 

Farient Advisors LLC is an independent premier executive compensation, performance, and corporate governance consultancy. Farient provides a full array of services, linking business strategy to compensation through a tailored, analytically rigorous, and collaborative approach. Farient has locations in Los Angeles, New York, Louisville, and Dallas and works with clients globally through its partnership in the Global Governance and Executive Compensation Group (GECN). Farient is a certified diverse company and is recognized by the Women’s Business Enterprise National Council.