WTW’s “Tips for drafting a clawback policy to protect against future risks” recommends inclusion (or exclusion) of specific provisions or types of provisions in SEC-compliant clawback policies to: (i) reduce the likelihood of needing to rely on the “impracticality” exceptions and manage the associated regulator and investor scrutiny; (ii) promote covered executive officer “buy-in”; (iii) assure the board’s/committee’s authority to retain experts to assist with calculating the clawback value; and (iv) maximize the policy’s flexibility and adaptability.
The memo also offers a list of other compensation- and governance-related documents that companies should consider for potential amendment to ensure alignment with the clawback policy, process, and board/committee oversight and enforcement authority.
Editor’s Note: Policy inclusions/exclusions will be one of several key topics addressed by our panel of experts in our upcoming webinar: “Clawback Policy Requirements: What to do Now.” Register now and send your questions in advance to Randi Morrison at rmorrison@societycorpgov.org.