On June 9, 2023, the Securities and Exchange Commission (SEC) approved the executive compensation recovery “clawback” listing standards proposed by the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (Nasdaq). With the SEC’s approval of the proposals, NYSE- and Nasdaq-listed issuers are now required to establish and enforce compensation recovery, or “clawback,” policies in compliance with Rule 10D-1 under the Securities Exchange Act of 1934, as amended, and the applicable listing standards by Friday, December 1, 2023.[1]
As discussed in our previous Viewpoints advisory, Rule 10D-1 requires the national securities exchanges to adopt listing standards mandating all issuers to implement policies requiring clawback of incentive-based compensation paid to corporate executives when that compensation is based upon the issuer’s meeting misreported financials that later require an accounting restatement.
Both the NYSE and Nasdaq’s new listing standards closely align with the language of Rule 10D-1, including what constitutes incentive-based compensation. The NYSE’s relevant listing standards introduce two new sections – Sections 303A.14 (Erroneously Awarded Compensation) and 802.01F (Non-compliance with Section 303A.14) – to the NYSE Listing Company Manual. Nasdaq’s relevant listing standards introduce a new Rule 5608 (Recovery of Erroneously Awarded Compensation) and several other related rule amendments, including amendments to its Rule 5800 Series (Failure to Meet...
The United States alleges that from September 2015 through December 2020, St. Michael’s Eye & Laser Institute (St. Michael’s) and Dr. Michaelos caused the submission of false claims for transc...