How U.S. compensation clawback legislation could impact Canadian employers

By Julius Melnitzer | July 20, 2023

New U.S. Securities and Exchange Commission listing requirements that impact compensation clawbacks could create conflicts with domestic employment laws for Canadian companies listed on U.S. stock exchanges.

The rules are expected to take effect on Oct. 2, 2023, with compliance mandated by Dec. 1, 2023. They require all issuers on U.S. exchanges to adopt mandatory clawback policies for incentive compensation actually received by executives during the three years preceding a financial year restatement.

The policies must provide that companies recoup the amount by which the original compensation exceeds what the executives would’ve received based on the original statements, whether or not there was any misconduct or honest error by the executive. The rules also require issuers to disclose the compliance policies as well as any efforts made to recoup compensation once the policy has triggered a clawback.

“The consequences of non-compliance include the risk of civil penalties and even de-listing,” says Lynne Lacoursière, co-chair of Osler, Hoskin & Harcourt LLP’s executive compensation practice, noting the problem is that certain Canadian employment laws may conflict with the U.S. rules. MORE . . .

Julius Melnitzer is a Toronto-based legal affairs writer, ghostwriter, writing coach and media trainer. Readers can reach him at [email protected] or


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