A public company instituted a clawback policy.What does this mean?
A)The company can require the CEO and CFO to reimburse the company for any bonus or profits they recieved from selling company stock within a year of the release of flawed financials.
B)At least once every three years, companies must take a nonbinding shareholder vote on the compensation of the five highest-paid executives.
C)The company is prohibited from expelling shareholders unless the firm pays a fair price for the minority stock and the expulsion has a legitimate business purpose.
D)The company has decided that the compensation level of its executives is not in the company's best interests, so it reduces all executive pay levels by a certain percentage.

Question

Quizplus · Accepted Answer

A clawback policy allows a company to recoup bonus or profits paid to executives if they were based on inaccurate financial information or misconduct. This is usually done to hold executives accountable for their actions and to restore confidence in the company's financial reporting.

A Public Company Instituted a Clawback Policy