‘Clawbacks’ Could Backfire – The New York Times

Instead of acting as a check on compensation and accountability, the new law increasingly looks as if it could drive up base salaries — and make executives less aligned with shareholders — or increase incentive pay to even higher levels to account for the risk of any potential clawback.

“The clawback requirements as proposed could influence companies to move away from incentive compensation that is tied to financial performance metrics (as opposed to subjective or operational metrics) to avoid the clawback issue altogether,” Jones Day, the law firm, said in a recent note to clients.

‘Clawbacks’ Could Backfire – The New York Times