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The enforcement of rules meant to reclaim compensation paid executives whose companies had to restate financial results has been virtually nonexistent...
Subjecting a broad swath of executive officers to a no-fault recovery mandate creates the potential for substantial injustice.
The SEC incentivized this to continue by choosing to not enforce this new law for almost five years after Sarbanes-Oxley was passed.
The population of eligible restatements continues to decline, perhaps because the decision of whether to make the kind of restatement that qualifies for a clawback is based on subjective criteria.
The rules as proposed could prove to be very difficult to administer as a practical matter.
Congress shifted a big implementation responsibility to the issuer and the penalty for non-compliance…is draconian.