Salary FYI

Clawback

Employment

A contractual provision that requires employees to return previously paid compensation under certain conditions, such as leaving early, misconduct, or financial restatements.

## Clawback

A clawback clause gives the employer the right to recoup compensation that has already been paid under specific circumstances.

### Common Triggers

| Trigger | Affects | Example |
|---------|--------|--------|
| Early departure | Signing bonus, relocation | Leave within 1–2 years |
| Financial restatement | Executive bonus | SEC requires under Dodd-Frank |
| Misconduct | All variable pay | Fraud, policy violation |
| Non-compete breach | Training costs, bonus | Starting at competitor |

### SEC Clawback Rule (2023)

SEC Rule 10D-1 requires all US public companies to adopt clawback policies for executive compensation. If financials are restated, executives must return incentive-based compensation that exceeds what would have been paid under the restated numbers.

### Signing Bonus Clawback

Most signing bonuses include a clawback with prorated repayment. A $30,000 signing bonus with a 2-year clawback: leaving after 6 months typically requires repaying $22,500 (75%).