The New York Stock Exchange (NYSE) on June 5, 2023, filed an amendment to its incentive compensation clawback listing standard originally proposed in February 2023. The Nasdaq Stock Market followed suit and filed an analogous amendment to its proposed clawback listing standard the following day. In both cases, the proposed amendments would push the effective date of the new listing standards to Oct. 2, 2023. Assuming no further delays with the rollout of the clawback listing standards and expected U.S. Securities and Exchange Commission (SEC) approval, affected companies will likely be required to adopt and file compliant clawback policies by Dec. 1, 2023.
Beyond delaying the effective date of the new NYSE and Nasdaq listing standards, the proposed amendments include new notice and cure provisions, which may be triggered in the event of noncompliance with the clawback requirements. The amended listing standards remain unchanged from the originally proposed standards in all other respects.
Holland & Knight has closely tracked the developments of the SEC Rule since its release and provided a discussion of the proposed listing standards earlier this year. In order to avoid a fourth quarter crunch with boards and compensation committees, public companies should consider ramping up efforts to have updated clawback policies ready for adoption by Dec. 1, 2023.
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