EGC Corporate Governance Practices (May 2018)

EGC Corporate Governance Practices: A Survey and Related Resources PAGE 20 Compensation of Officers Clawback Policies Approximately 7.0% of issuers had clawback policies for executive officers, and approximately 93.0% did not. Figure 30 : N=848. Use of Compensation Consultants Yes; 59 No; 789 Clawback Policies for Executive Officers (By Frequency) Yes No The SEC requires a listed company to disclose in its proxy statement the role of any compensation consultants in determining or recommending the amount or form of executive and director compensation, identify such consultants, state whether such consultants are engaged directly by the compensation committee (or persons performing the equivalent functions) or any other person, and describe the nature and scope of their assignment and the material elements of the instructions or directions given to the consultants with respect to the performance of their duties under the engagement. Provisions (and, subsequently, proxy access proposals) are typically evaluated. Clawback policies require executive officers to pay back incentive-based compensation that they were awarded erroneously. In July 2015, the SEC proposed a new rule pursuant to which listed companies would be required to develop and enforce recovery policies that, in the event of an accounting restatement, “claw back” from current and former executive officers incentive-based compensation they would not have received based on the restatement. Recovery would be required without regard to fault. The proposed rule requires disclosure of listed companies’ recovery policies and their actions under those policies. The SEC has not yet adopted a final rule regarding clawback policies.