Clawbacks, Compliance and Incentive Compensation: A Supplemental Approach

Overview


Michael Peregrine and Andrew Liazos were the McDermott co-authors, with Timothy Cotter, of this bylined article urging governing boards to consider compliance-based incentive compensation as a supplement to statutorily mandated “clawback” provisions to recoup past compensation from “culpable” executives. “In an era of increasing focus on corporate (and executive) accountability, compliance with statutory clawback rules may not be enough to demonstrate the board’s commitment,” the authors warned, noting that a compliance-based incentive compensation is “largely pro-active rather than punitive.”