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Clawback Provisions in Executive Compensation Contracts

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  • Stark Johanna

    (Senior Research Fellow at the Max Planck Institute for Tax Law and Public Finance in Munich.Germany)

Abstract

Clawbacks are contractual provisions in executive compensation contracts that allow for an ex post recoupment of variable pay if certain triggering conditions are met. As a result of regulatory responses to financial crises and corporate scandals, as well as growing shareholder pressure to implement effective measures against executive misbehaviour, the prevalence of such clauses has risen considerably in the recent past, beginning in the US after the 2000 financial crisis. As clawbacks have become a buzzword in the European debate about also ensuring good corporate governance beyond the financial sector, it is time to critically discuss the hopes that have been associated with various types of such provisions.

Suggested Citation

  • Stark Johanna, 2021. "Clawback Provisions in Executive Compensation Contracts," European Company and Financial Law Review, De Gruyter, vol. 18(4), pages 669-696, August.
    • Handle: RePEc:bpj:eucflr:v:18:y:2021:i:4:p:669-696:n:3
    DOI: 10.1515/ecfr-2021-0026
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