§78j–4 — Title 15 Commerce and Trade | U.S. Code

Summary

The SEC must write rules that tell national stock exchanges and securities associations not to list a company’s securities if the company does not follow these requirements. Each company must have a written policy that explains how it discloses incentive pay tied to financial information the company must report. The policy must also require the company to recover from any current or former executive any incentive-based pay (including stock options) they received in the 3-year period before the company must restate its accounting if that pay was based on wrong financial data, but only the amount above what they would have been paid under the corrected accounting.

Title 15, §78j–4

Commerce and Trade — Source: USLM XML via OLRC

(a)The Commission shall, by rule, direct the national securities exchanges and national securities associations to prohibit the listing of any security of an issuer that does not comply with the requirements of this section.

(b)The rules of the Commission under subsection (a) shall require each issuer to develop and implement a policy providing—

(1)for disclosure of the policy of the issuer on incentive-based compensation that is based on financial information required to be reported under the securities laws; and

(2)that, in the event that the issuer is required to prepare an accounting restatement due to the material noncompliance of the issuer with any financial reporting requirement under the securities laws, the issuer will recover from any current or former executive officer of the issuer who received incentive-based compensation (including stock options awarded as compensation) during the 3-year period preceding the date on which the issuer is required to prepare an accounting restatement, based on the erroneous data, in 11 So in original. Probably should be “compensation in”. excess of what would have been paid to the executive officer under the accounting restatement.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as a note under section 5301 of Title 12, Banks and Banking.

§78j–4 Recovery of erroneously awarded compensation policy

Summary

Title 15, §78j–4

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Citations & Metadata