A Practical Guide to the SEC’s New Clawback Rules

Mims Maynard Zabriskie | Morgan, Lewis & Bockius LLP

Mims Maynard Zabriskie advises on complex executive compensation and employee benefit plan matters, including the design, negotiation, and implementation of executive compensation, equity compensation, and tax–qualified retirement plans and shareholder approval of equity plans. She counsels large publicly and privately owned businesses, including Fortune 500 enterprises, as well as technology companies, colleges and universities, and other non-profit entities, on a range of legal issues related to executive compensation governance, and employee benefit plans.

Co-leader of the firm’s Executive Compensation Task Force, Mims advises corporations and non-profit entities, and their compensation committees, with respect to governance issues relating to executive compensation and works with corporations, non-profit entities and executives to design and negotiate employment agreements, severance agreements, and change of control agreements for key executives. She advises companies with respect to equity compensation plans, deferred compensation plans and other executive plans, and change of control agreements in preparation for sales, and public offerings. She advises on employee benefits, equity compensation and executive compensation issues in major corporate transactions, including mergers and acquisitions, sales, IPOs, and spinoffs.

Mims advises publicly held companies in matters related to shareholder approval of equity compensation plans and executive compensation proxy disclosures. She also counsels boards of directors, compensation committees, and administrators in fiduciary best practices, compliance procedures, and governance issues.

Mims represents executives in the negotiation of employment agreements and equity compensation when executives are changing positions. She represents individual executives and management teams in the negotiation of employment agreements and equity compensation in connection with the sale of businesses, including sales to private equity firms and strategic buyers.

Mims also works with clients on qualified and nonqualified plans, including retirement and other defined benefit plans, and 401(k) and other defined contribution plans. She advises on severance plans and clawback policies; matters related to ERISA and the Internal Revenue Code, including Section 409A, Section 162(m), and Section 280G; and issues involving the Internal Revenue Service and the US Department of Labor.

Mims works with boards to determine whether and when a compensation committee should seek independent counsel that does not otherwise represent the company or its management.

Active in a variety of professional and civic organizations, she lectures on executive compensation and equity compensation issues at legal continuing education programs. She is listed in Chambers USA (2007–2021) and Best Lawyers in America (1987–2022).

Rosina B. Barker | Morgan, Lewis & Bockius LLP

Rosina B. Barker counsels clients on the Employee Retirement Income Security Act (ERISA), tax, and securities law aspects of their employee benefits and executive compensation plans. Her practice ranges from sophisticated defined benefit pension plan matters to complex executive compensation issues.

Rosina is a nationally known author on Internal Revenue Code Section 409A compliance, and numerous companies engage her specifically to provide counsel in this area. She has drafted and amended multiple equity, deferred compensation, and incentive pay plans for compliance with Code Sections 409A, 83, 162(m), 457A, and 280G, and she advises clients on the many tax, fiduciary, and governance issues arising from these plans.

Rosina frequently counsels clients on the benefits and executive compensation issues arising from mergers, divestitures, and other business reorganizations, and in the last year alone, she advised on corporate transactions totaling more than $13 billion.

She practices extensively with respect to large, innovative defined benefit plans and the novel issues they raise. She has advised on myriad derisking transactions ranging from several hundred million dollars to more than $50 billion, including annuity purchases, lump-sum offers, and plan terminations. Rosina obtained one of the first Internal Revenue Service (IRS) derisking private letter rulings (PLRs) that permit a defined benefit plan to offer lump-sum payouts to retirees in pay status. For a client with a uniquely complex cash balance plan design, she obtained a favorable determination letter and technical advice memorandum (TAM) reversing the IRS’s initial adverse position, including the government’s earlier, published position that the design violated ERISA and the qualification rules of the Internal Revenue Code. She represents clients before the IRS, US Department of Labor (DOL), and Pension Benefit Guaranty Corporation (PBGC) on major funding issues, including waiver applications, PBGC early warning negotiations, and DOL fiduciary audits.

Rosina advises plan fiduciaries on prohibited transactions and other plan investment issues. She recently advised clients on how to create an innovative Dudenhoeffer-consistent fiduciary process to evaluate the prudence of keeping the employer stock fund.

Before joining Morgan Lewis, Rosina was a partner in the executive compensations and benefits practice of a boutique law firm. She gained valuable government experience before entering private practice by serving on the tax staff of the US House of Representatives’ Ways and Means Committee, where she had primary staff responsibility for all pension and employee benefit legislation before the Committee.

Timothy J. Durbin | Morgan, Lewis & Bockius LLP

Timothy J. Durbin advises public and private companies on a wide variety of executive compensation and employee benefits matters, both in ensuring compliance in the ordinary course of business and when engaging in corporate transactions, including M&A, spinoffs, initial public offerings, joint ventures, and restructurings.

Timothy designs, negotiates, and implements many forms of compensation and benefits packages including employment agreements, equity and equity-based compensation programs, severance plans and arrangements, performance incentives and management participation in corporate transactions, change in control protections, and deferred compensation.

Prior to joining Morgan Lewis, Timothy was an associate in the executive compensation practice group of a New York-based international law firm for over four years. During law school, he worked at the New York regional office of the US Department of Labor Employee Benefits Security Administration where he investigated retirement plans and plan service providers to ensure compliance with Title I of ERISA and correct ERISA violations.

I. The SEC clawback rules | 2:00pm – 2:20pm

II. Implementation of clawback policies | 2:20pm – 2:40pm

III. SEC reporting and disclosure requirements relating to clawbacks | 2:40pm – 3:00pm

Break | 3:00pm – 3:10pm

IV. Tax aspects of clawbacks | 3:10pm – 3:40pm