Document Type
Comment
Abstract
Saving money should not be expensive. Compensation “clawbacks” are a legal mechanism for companies to reclaim employee compensation, but the legislative framework is complex and disorganized. There are four primary federal claw-back provisions: Sarbanes-Oxley § 304, Dodd-Frank § 954, 12 U.S.C.A. § 5221(TARP), and Dodd-Frank § 956—as well as voluntary contractual clawback policies. This comment untangles the web of clawback legislation by overlaying each clawback mechanism to extract a single, clear, and concise description of executive compensation clawbacks, called the “Comprehensive Clawback Coverage.” The Comprehensive Clawback Coverage reveals a major flaw in the legal and regulatory framework: clawbacks increase agency costs. In other words, they are expensive. The logical solution involves legislative repeal, legislative amendment, or regulatory policy shift with respect to executive compensation clawback provisions.
First Page
353
Last Page
396
Recommended Citation
Connor Douglas Maag,
"Flaw-Backs:" Executive Compensation Clawbacks and Their Costly Flaw,
11 J. Bus. Entrepreneurship & L.
353
(2018)
Available at: https://digitalcommons.pepperdine.edu/jbel/vol11/iss2/6
Included in
Benefits and Compensation Commons, Business Administration, Management, and Operations Commons, Business Organizations Law Commons, Finance and Financial Management Commons
