On 26 October 2022, the SEC adopted final incentive compensation clawback rules requiring US-listed issuers to:
- Develop and implement a policy for the recovery of incentive-based compensation that is erroneously “received” by current and former executive officers during the three completed fiscal years immediately preceding the date that the issuer is required to prepare an accounting restatement.
- File that policy as an annual report exhibit and satisfy related disclosure obligations in accordance with SEC rules.
The rule, known as Rule 10D-1, directs national securities exchanges to establish listing standards in line with the final rule. Companies that fail to comply with the rule may be delisted.
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