SEC Issues Final Rule on the Recovery of Erroneously Awarded Compensation

The SEC has issued a final rule, Listing Standards for Recovery of Erroneously Awarded Compensation, to implement a requirement of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Specifically, the final rule “require[s] national securities exchanges to establish listing standards that would require listed issuers to adopt and comply with a compensation recovery policy, often known as a clawback policy.” In addition, listed issuers must “provide disclosure about [clawback] policies and how they are being implemented.”

The final rule will become effective 60 days after the date of its publication in the Federal Register. For more information, see the press release, fact sheet, and statements by SEC Chair Gary Gensler and Commissioner Hester Peirce on the SEC’s Web site.