Those standards will require each company on the exchanges to disclose its policy for recovering incentive-based compensation that’s received by both former and current executive officers in excess of what would have been received under an accounting restatement. A listed issuer would be required to file the policy as an exhibit to its annual report and to disclose whether the company has exacted any clawbacks as a result of that policy. The proposed rule applies to all executive officers, regardless of whether they had any role in the problems leading to the restatement. Most current corporate clawback policies, aligned with the Sarbanes-Oxley Act requirement, affect only the CEO and CFO. “The proposed new rules and regulations will require many companies to rescind their existing clawback policies and to author new policies to become compliant,” says John Ellerman, partner at Pay Governance LLC, a consulting firm.

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