January 28, 2023

Volume XIII, Number 28

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Final SEC Clawback Rules: Key Dates that Issuers Need to Know

On November 28, 2022, the Securities and Exchange Commission (the “SEC”) published the final clawback rules (the “Final Rules”) under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) in the Federal Register.

Now that the Final Rules have been published in the Federal Register, issuers should be aware of the following key deadlines[1]:

  • January 27, 2023: The Final Rules become formally effective (60 days after the Final Rules were published in the Federal Register).

  • February 24, 2023: Outside date for national securities exchanges (“exchanges”) to file proposed listing standards that comply with the Final Rules (this is the last business day before the 90th day post-publication window closes on February 26, 2023).

  • November 28, 2023: Outside date for the exchanges’ listing standards to become effective.

    • On the date that exchanges’ listing standards become effective all incentive-based compensation “received” (as defined in the Final Rules) by executive officers on or after this date must be subject to a compliant clawback policy.

    • Disclosures required by Final Rules must be included in all applicable SEC filings required on or after this date.

  • 60 days after listing standards become effective (latest date: January 27, 2024): Outside date for issuers to adopt compliant clawback policy.

The Final Rules were adopted on October 26, 2022, and we discuss the detailed requirements of the Final Rules and related practical considerations in our earlier blog post. We also discuss the interaction of the Final Rules and the DOJ clawback guidance in this blog post.


FOOTNOTES

[1]  Please note that some of the date references are to “outside” dates (i.e. the latest possible date) and the timetable could be accelerated depending on exactly when the exchanges and SEC take action, so issuers should continue to monitor developments.

© 2023 Proskauer Rose LLP. National Law Review, Volume XII, Number 336
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Michael Album Employee Benefits Lawyer Proskauer
Partner

Michael J. Album is a partner in the Employee Benefits & Executive Compensation Group, and represents companies and compensation committees, private equity firms and hedge funds, and CEOs, senior executives (in numerous business sectors) and portfolio managers on a full range of executive compensation matters. As part of his practice he has represented management teams in numerous management buy-outs (including in the health care, retail and asset management sectors) and has represented “founders” and partners in a variety of businesses on restructuring and “business...

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Colleen Hart, Proskauer Rose, Los Angeles, Tax Consequence lawyer, Corporate Governance Attorney
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Colleen Hart is a partner in the Tax Department and a member of the Employee Benefits & Executive Compensation Group.

Colleen advises companies, executives and boards on complex executive compensation matters. She offers a multidisciplinary approach to compensation and benefits issues with a focus on tax planning, securities laws and corporate governance. Matters she handles include the negotiation, structuring and implementation of employment and change-in-control agreements and deferred compensation, equity and incentive compensation plans...

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Employment lawyer, Proskauer, Ekaterina (Kate) Napalkova
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Kate Napalkova is a special employee benefits and executive compensation counsel in the Tax Department and a member of the Employee Benefits & Executive Compensation Group.

Kate advises public and private companies, private investment funds, executives and boards on a broad range of compensation and employee benefits matters. Kate’s practice includes the compensation and employee benefits aspects of mergers and acquisitions, reorganizations, spin-offs, initial public offerings, financings and other corporate transactions. Kate’s practice further focuses on advising clients...

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Andrea S Rattner, Tax Attorney, Proskauer Law Firm
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Andrea S. Rattner is a member of the firm’s Executive Committee and the immediate past Chair of the Tax Department. 

Andrea practices in the field of employee benefits and executive compensation law. She counsels clients with respect to the tax, securities, corporate governance, stock exchange, ERISA and other implications affecting executive compensation arrangements. Andrea regularly provides advice regarding equity arrangements (such as stock options, restricted stock, RSUs and phantom stock), employment agreements, change-in-control...

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Seth Safra, Proskauer Law Firm, Employee Benefits, Executive Compensation and ERISA Litigation Attorney
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Seth Safra is a partner in the Employee Benefits & Executive Compensation Group, where he counsels clients on all aspects of employee benefits and executive compensation.

Seth advises clients on ERISA and other related laws with respect to the design and administration of qualified and non-qualitied retirement plans, including defined contribution (including 401(k) and ESOPs) and cash balance plans. In addition, Seth counsels clients on their health & welfare plans, including advising on issues related to health care reform.

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