SECThe Securities and Exchange Commission (SEC) will propose rules forcing companies to claw back, or revoke, incentive pay if firms’ restate prior period financial results that were used to compute incentive pay.  Unlike existing rules, in which clawbacks are triggered only in a narrow set of circumstances involving misconduct at companies that restate earnings, the SEC’s proposal would apply to all manner of restatements—including those issued because of mistakes.

The rules, if finalized, could force an executive who received stock options after the company met a performance target, such as a revenue figure, to return some or all of that compensation if a misstatement shows revenue fell below the executive’s performance target.

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