Excess Pay and the Dodd-Frank Clawback
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Publication Date:
October 19, 2011
The Dodd-Frank Act requires firms to adopt clawback policies for recovering certain types of excess pay—payouts that result from errors in performance measures (such as reported earnings). This report discusses the costs of excess pay to investors, explains why most firms' existing arrangements fall far short of what Dodd–Frank is likely to require, and offers guidance to boards seeking to eliminate the types of excess pay not reached by Dodd–Frank.