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On October 26, 2022, the Securities and Exchange Commission (the “SEC”) adopted Rule 10D-1, a rule requiring companies to recover erroneously awarded incentive-based compensation based on mistakes in the companies’ financial reporting — the so-called clawback rule (the “Rule”).
On August 25, 2022, the Securities and Exchange Commission (the “SEC”) announced that it adopted a final rule requiring companies to disclose information that is intended to reflect the relationship between compensation paid to executives and the company’s financial performance — the so-called pay-versus-performance rule (the “Rule”).
Although not his most lyrically creative effort, John Mayer’s “Say” has a very important lesson for those drafting contracts: “Say what you need to say.”