Clawbacks and deferred pay-outs

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Provisions in the executive compensation contract that enable a company to reclaim compensation in future years if it becomes clear that bonus compensation should not have been awarded previously. Clawbacks are intended to discourage executives from artificially inflating financial results to increase the value of their bonuses. In the United States, the Dodd-Frank Wall Street Reform Act requires that companies develop, implement, and disclose clawback policies.

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The Economics of Deferral and Clawback Requirements