Clawback Policy

A clawback policy is a company’s stated mechanism for recovering incentive-based compensation already paid to an executive, most commonly triggered by an accounting restatement. Every U.S.-listed company has been required to adopt a compliant policy since the SEC’s Dodd-Frank Section 954 rule took effect in 2023, implementing listing standards at the NYSE and Nasdaq.

The mandatory version is narrower than it sounds: it applies to incentive compensation tied to a financial reporting measure, triggers on a restatement, and is not fault-based — recovery applies whether or not the executive did anything wrong. Some companies layer a broader, discretionary policy on top, extending recovery to misconduct unrelated to any restatement.

How specific a company’s disclosure gets — whether it names exact triggers and dollar mechanics, or states only that a policy exists — varies by company and is itself a fact worth reading, since a vaguely described policy and a fully specified one carry different practical force.

MarketAxess's disclosed clawback provision leaves compensation recovery to the board or committee's discretion, without further specifics on triggers or amounts, as the agreement states it.