Posts Tagged ‘clawbacks’

Companies’ Claws May Have Limited Reach

by  

No Comments | Share/Save


Although more companies are insisting on clawback provisions in executives’ contracts, their effectiveness as a tool to recoup bonuses and other compensation when things go bad remains to be seen. Some critics view them as legally questionable and point to, among other obstacles, conflicts with state wage laws that could be used to stymie a company’s attempt to reclaim pay.

Filed under: Newsfeeds



Are There Really Any Teeth in These Claws??

by  

No Comments | Share/Save

Expert Perspective by Grahall’s OmniMedia Editorial Board

expert perspective telescopeStephen Gandel says in his January 27, 2009 article in Time Magazine (Can Financial Firms Get Executives to Give Back Pay?): “In the past few months, a number of financial firms have instituted or beefed up rules that would allow them to force employees to return year-end bonuses. So-called clawbacks would be triggered by subsequently discovered misconduct and some firms say they may even apply in cases where employees made trades that looked profitable at first, but go sour… While companies have always had the right to sue employees for ill-gotten gains, more firms are adding provisions to reclaim pay not just for illegal behavior, but poor decisions.”

While this sounds good, clawbacks are difficult to implement for several reasons
Continue reading “Are There Really Any Teeth in These Claws??” »

Filed under: Expert Perspective



Wall Street Toughens Rules on Clawbacks

by  

No Comments | Share/Save

Banks and securities firms are toughening rules that give them power to seize pay from employees whose bets or other actions blow up later. But they still mightn’t be tough enough. Known as clawback provisions, such internal rules used to cover just top executives or fraud.

Filed under: Newsfeeds



Can Financial Firms Get Executives to Give Back Pay?

by  

No Comments | Share/Save

Published in Time January 27, 2010 by Stephen Gandel

In the past few months, a number of financial firms have instituted or beefed up rules that would allow them to force employees to return year-end bonuses. So-called clawbacks would be triggered by subsequently discovered misconduct and some firms say they may even apply in cases where employees made trades that looked profitable at first, but go sour.

Link to full article

Filed under: Newsfeeds



Spending Bonus Cash Becomes Risky as Clawbacks Spread (Update1)

by  

No Comments | Share/Save

Many U.S. executives opening their 2009 bonus envelopes will find something extra this year: more conditions on whether they can keep their money or stock.  That’s because a growing number of companies are inserting clawback provisions in employment agreements, which puts incentive cash or stock at risk of being rescinded in the future, said Mark Poerio, co-chair of the executive compensation practice in the Washington office of law firm Paul, Hastings, Janofsky & Walker LLP.

Filed under: Newsfeeds



Wall Street’s bonus baby steps

by  

No Comments | Share/Save

Published in CNN Money, December 30, 2009 by Collin Barr

So much for Wall Street sobering up.
Under pressure to prevent another meltdown, Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) have been cutting back on cash bonuses and insisting on so-called claw-backs — arrangements that allow companies to reclaim past bonuses when there is employee misconduct.
Yet for all their supposed reform-mindedness, the banks show no sign of pulling the emergency brake on the great compensation escalator.
A year after taxpayers saved the finance industry from collapse, the big banks will hand out billions of dollars in bonuses in the coming weeks — at a time where unemployment tops 10% and many people are still losing their homes to foreclosures. To say this rankles in some quarters is an understatement.

Link to full article

Filed under: Newsfeeds



CEO of Beazer Receives SEC Notice

by  

No Comments | Share/Save

http://online.wsj.com/article/SB10001424052748704431804574539631426818194.html?mod=rss_law
NOVEMBER 16, 2009, 11:31 P.M. ET
CEO of Beazer Receives SEC Notice
By DAWN W OTAPKA And MARK MAREMONT
The Securities and Exchange Commission may move to claw back a portion of the compensation Beazer Homes USA paid its chief executive during a period for which the company later restated earnings.
The Atlanta builder disclosed Monday that Ian J. McCarthy received a Wells notice from the SEC, indicating that the agency’s staff is recommending civil action against the executive.
Such a move would mark the first time the agency has tried to claw back pay from a sitting CEO who wasn’t alleged to have participated in a corporate fraud. But in recent months it has sued at least two former executives for back pay even though they weren’t implicated in wrongdoing, a sign the agency is using the tactic more aggressively.

Published in The Wall Street Journal November 16, 2009 by Dawn W Otapka and Mark Maremont

The Securities and Exchange Commission may move to claw back a portion of the compensation Beazer Homes USA paid its chief executive during a period for which the company later restated earnings.

The Atlanta builder disclosed Monday that Ian J. McCarthy received a Wells notice from the SEC, indicating that the agency’s staff is recommending civil action against the executive.

Such a move would mark the first time the agency has tried to claw back pay from a sitting CEO who wasn’t alleged to have participated in a corporate fraud. But in recent months it has sued at least two former executives for back pay even though they weren’t implicated in wrongdoing, a sign the agency is using the tactic more aggressively.

Link to full article

Filed under: Newsfeeds



Don’t be Fooled

by  

2 Comments | Share/Save

Expert Perspective by Grahall’s OmniMedia Editorial Board

expert perspective telescopeRick Newman’s September 23rd article “Outlandish CEO Pay: How to Fix the Problem” published in Seeking Alpha summarizes, simplistically, the problem of excess CEO pay and the possible solutions to this problem, recounting the problems faced by Merrill Lynch, Citigroup and AIG following poor leadership by Stan O’Neal, Charles Prince and Martin Sullivan, respectively.  Newman’s point being these Wall Street icons made millions (and millions) while the companies they led lost billions.

Although overly simplified, we don’t disagree with most of what Newman says –  in particular, linking pay to long term performance and establishing claw backs as standard protocols in executive contracts. Grahall’s approach to structuring executive compensation packages is to link pay to events. In many companies there is a mismatch between these elements. 
Continue reading “Don’t be Fooled” »

Filed under: Expert Perspective



New SEC Action: Bank CEOs, CFOs Vulnerable to Compensation Clawback for Acts of Others

by  

No Comments | Share/Save

Published in FinCriAdvisors.com September 9, 2009

Performance-based compensation of bank CEOs and CFOs at public companies has been left vulnerable to “clawback” forfeiture under a new position staked out by the SEC. The agency has demanded that a CEO surrender $4.1 million because of staff misconduct he did not know about that led to a restatement of financials.

Link to full article.

Filed under: Newsfeeds



US Pay Czar Says He Can ‘Claw Back’ Exec Pay

by  

No Comments | Share/Save

Published in CNBC.Com Monday, 17 August 2009 by Reuters

Kenneth Feinberg, the Obama administration’s pay czar, said on Sunday he has broad and “binding” authority over executive compensation, including the ability to “claw back” money already paid, and he is weighing how and whether to use that power.

Link to full article.

Filed under: Newsfeeds