SEC seeks comments – Recovery of Erroneously Awarded Compensation

Posted on June 9, 2022Comments Off on SEC seeks comments – Recovery of Erroneously Awarded Compensation

SEC Reopens Comment Period for Proposed Rule on Recovery of Erroneously Awarded Compensation

Washington, DC (STL.News) The Securities and Exchange Commission yesterday reopened the comment period on proposed rules for listing standards for recovery of erroneously awarded compensation, and the staff of the Commission released a memo that contains additional analyses and data that has the potential to be informative for evaluating the proposals.

Specifically, the staff memo:

  • Discusses the increase in voluntary adoption of compensation recovery policies by issuers;
  • Provides estimates of the number of additional restatements that would trigger a compensation recovery analysis if, as the Commission described in the October 2021 reopening release, the rules were extended to include all required restatements made to correct an error in previously issued financial statements; and
  • Briefly discusses some potential implications for the costs and benefits of the proposed rules.

The rules were initially proposed by the Commission in July 2015 in order to implement Section 954 of the Dodd-Frank Act, and the comment period for the proposal was reopened in October 2021.  The staff memorandum is available for review as part of the public comment file.  The public comment period will remain open for 30 days after publication in the Federal Register.

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