Compliant Clawback Policies Must be Adopted Before December 1, 2023
As noted in a prior post, both the New York Stock Exchange (“NYSE”) and Nasdaq have adopted listing standards that requires issuers to adopt compliant clawback policies by December 1, 2023. Adoption of such policies and/or the amendment of an existing policy to make it compliant with the NYSE and Nasdaq listing standards will require Board of Director approval. It is almost September so time is running out to get compliant policies in front of public company boards for their review and approval.
From now to the December 1, 2023 deadline issuers should consider engaging outside counsel to assist with the following tasks: (i) the preparation of a new and compliant clawback policy (or if a policy already exists, the amendment of such policy to comply with applicable listings standards), (ii) the review of existing equity plans, incentive plans and related employment documents to determine whether such documents require amendment to synchronize with the compliant clawback policies, and (iii) consideration of how the issuer intends to disclose the policy in proxy statements filed after December 1, 2023.