New SEC clawback compensation rules impact Canadian issuers

Lynne Lacoursière, Benjamin Iscoe

By Julius Melnitzer | July 11, 2023

Canadian companies listed on US stock exchanges are among those affected by new Securities and Exchange Commission listing requirements impacting compensation clawbacks and expected to take effect on October 2, 2023, with compliance mandated within 60 days.

The rules require all issuers on US 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 the companies recoup the amount by which the original compensation exceeds what the executives would have received based on the original statements, whether or not there was any misconduct or honest error by the executive.

“The consequence of non-compliance is the risk of civil penalties, and even delisting,” says Lynne Lacoursière, the Toronto-based co-chair of Osler, Hoskin & Harcourt’s executive compensation practice.

It’s not as if compensation clawback policies are new to Canadian companies.

“The SEC rules essentially make prescriptive concepts that many issuers have already adopted voluntarily,” says Benjamin Iscoe, a partner in Dentons Canada LLP’s Toronto corporate, securities and corporate finance, and mergers and acquisitions groups. “And although Canadian law does not currently require clawback policies, proxy advisory firms such as Glass Lewis and International Shareholder Services, as well as the Canadian Coalition for Good Governance, support them.” 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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