Clawbacks Are Hard, So Companies Try Postponing Pay Instead

Critics warn that deferring more pay, with risk of forfeiture, could discourage executives from reporting misconduct and make it too easy for companies to rescind pay.

“If we make these penalties even more severe, are more people going to come forward or fewer?” said Alan Johnson, managing director of Johnson Associates, a financial-services industry pay-consulting firm. “Clawbacks are time-consuming and expensive—but if you’re taking back people’s pay, I think it should be.”

The Wall Street Journal / February 7, 2021