The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act"), was signed into law by President Obama on July 21, 2010. The Act includes a requirement that all U.S. public companies incorporate so-called clawback provisions into incentive compensation arrangements for executive officers. Those clawback provisions will be triggered in the event of certain accounting restatements, and require companies to recover any excess compensation resulting from the misstated financial results during the 3-year period prior to the restatement. Companies have also implemented or are considering other types of clawback features beyond those required in the Act.
This PwC Dataline addresses the impact of these clawback features on the accounting for stock-based compensation arrangements.