The U.S. Department of Justice is eyeing new guidance for how prosecutors should assess employee compensation packages when determining whether a company’s compliance efforts warrant favorable treatment in the resolution of criminal investigations.
Acting Principal Deputy Assistant Attorney General Nicole Argentieri said Thursday that the Criminal Division is considering new guidance that would help companies structure their employee compensation packages to better position themselves in potential criminal investigations. Prosecutors may give favorable treatment to companies whose compensation structures reward compliant behavior and penalize misconduct. Argentieri forecasted that additional guidance would be forthcoming for evaluation of compensation clawback policies and/or bonuses that reward or deter compliant behavior.
This new guidance would supplement the so-called Monaco Memo — a memorandum released by Deputy Attorney General Lisa Monaco in September 2022 that instructs federal prosecutors to assess employee compensation structures when evaluating company compliance programs. The Monaco Memo states:
Compensation systems that clearly and effectively impose financial penalties for misconduct can incentivize compliant conduct, deter risky behavior, and instill a corporate culture in which employees follow the law and avoid legal “gray areas.” When conducting this evaluation, prosecutors should consider how the corporation has incentivized employee behavior as part...
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