While some organizations may be planning to rely on the compensation committee to deem executive incentive recoupment costs as “impracticable” so they can avoid enforcing now mandatory clawback regulations, this is not a get-out-of-jail-free card.

Companies must disclose why recoupment is impracticable, including details about how they calculated the amounts to be recouped. There is an overarching concern that shareholders, proxy advisors and the media will question the calculation that supports not seeking recoupment. We also anticipate that these same audiences will ask why the company did not have a mechanism in place to help ensure that officer-earned compensation is within reach. READ MORE