Katayun Jaffari,left, and Rikisha Collins,right, of Cozen O'Connor. Courtesy photos Katayun Jaffari,left, and Rikisha Collins,right, of Cozen O'Connor. Courtesy photos

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Introduction

On June 8, the U.S. Securities and Exchange Commission (SEC) reopened the comment period for the "clawback" rule proposed in July 2015 to strengthen the disclosures and standards for recovery of erroneously awarded compensation by publicly listed companies (proposed rule). According to SEC Chair Gary Gensler, the proposed rule provides companies with an "opportunity to strengthen the transparency and quality of corporate financial statements as well as the accountability of corporate executives to their investors." This article will provide a brief summary of the proposed rule and other SEC guidance with respect to executive compensation clawbacks.