News & Insights

Directors Governance Center

June 4, 2014

Clawbacks - 2013 Proxy Disclosure Study (PwC)


PwC recently analyzed the clawback policies of 100 large public companies as disclosed in their 2009 through 2012 year end proxies. The PwC report confirms the findings of a recent Equilar reportthat the number of companies disclosing clawback policies has seen a significant increase since the 2008 financial crisis. Other findings include:

*Most Common Triggers - The most common trigger was a restatement of financial results (92%), followed by employee misconduct (84%) and fraud (44%).

*Industry-Specific Triggers - Companies are beginning to develop industry-specific triggers. For example, 70% of the banking and capital markets firms surveyed had policies triggered by excessive risk-taking by executives.

*Discretionary Features - Most clawback policies (79%) included discretionary features for determining the amount of recovery, but very few provided for discretion with respect to the triggers.

*Award Types - The vast majority of policies (86%) covered both cash and stock awards.

The results of the study were published by PwC's human resource services practice. Additional information is available at: http://www.pwc.com/gx/en/hr-management-services/index.jhtml.