May 11, 2023

Public Companies May Need to Adopt Updated Clawback Policies by Aug. 8, 2023

Holland & Knight Executive Compensation and Benefits Info Flash
John D. Martini | Kerry L. Halpern | Michael Romeo
Executive Compensation and Benefits Info Flash

During the last week of April, the U.S. Securities and Exchange Commission (SEC) extended the deadline by which it must approve or disapprove of the proposed New York Stock Exchange (NYSE) and Nasdaq Stock Market compensation recovery listing standards (Listing Standards) mandated by the Dodd-Frank Act to June 11, 2023. Assuming that the SEC will approve the Listing Standards on June 9, 2023 (the final business day in the approval window), companies will need to adopt compliant clawback policies within 60 days, or by Aug. 8, 2023. While it is possible that the SEC may again extend its deadline or disapprove of the Listing Standards, both Listing Standards track closely to the requirements of the SEC rule (SEC Rule) and are thus expected to be approved.

Holland & Knight has closely tracked the developments of the SEC Rule since its release and provided an updated discussion of the proposed listing standards earlier this year. In order to avoid a late summer scramble with boards and compensation committees, public companies should consider ramping up efforts to have updated clawback policies ready for adoption by Aug. 8, 2023.

If you would like assistance with preparing a clawback policy that is compliant with the Listing Standards, evaluating your company's incentive-compensation arrangements or mitigating the risk of future required disclosures, contact the authors, another member of Holland & Knight's Executive Compensation and Benefits Team or your primary Holland & Knight attorney.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.

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