Executives required to repay compensation as a result of a compensation clawback regulation, provision or policy should be mindful of certain tax consequences to the executive as a result of the repayment. As described below, the tax consequences will be different when repayment occurs in a year subsequent to the year of the original payment versus when payment and repayment occur in the same year, and with respect to the former, there is more than one avenue of tax relief available to the executive stemming from the repayment.
Clawback Rules
Proposed Clawback Rules Released
By Colleen Hart & Joshua Miller on
The SEC recently released proposed rules to adopt the incentive-based compensation clawback provisions under Section 954 of The Dodd-Frank Wall Street Reform and Consumer Protection Act, nearly five years after the Dodd-Frank Act became law.