Stand-alone clawback agreement
Produced in partnership with Sam Whitaker of Shearman & Sterling
Stand-alone clawback agreement

The following Share Incentives precedent produced in partnership with Sam Whitaker of Shearman & Sterling provides comprehensive and up to date legal information covering:

  • Stand-alone clawback agreement

This Agreement is made on [date] between the following parties:

Parties

  1. 1

    [name of employer] [Limited OR Plc], a company incorporated in [England and Wales] (registered number [registered number]) whose registered office is at [registered office address] (the Company); and

  1. 2

    [name of executive] of [address of executive] (the Executive).

Background

    1. (A)

      The Company and the Executive entered into the [Employment Agreement OR Bonus Agreement] (as defined below), under which the Executive is eligible for a discretionary annual bonus.

    1. (B)

      The Executive has been conditionally awarded the Bonus (as defined below) in respect of [insert relevant year/performance period].

    1. (C)

      The Company and the Executive wish to enter into this Agreement to set out the basis on which all or part of the Bonus may be recovered by the Company in certain specified circumstances.

FORTHCOMING CHANGE: On 18 March 2021, it was announced that the government was launching a consultation on wide-ranging reforms to modernise the country’s audit and corporate governance regime, targeting the UK’s biggest businesses and ensuring markets work effectively. In relation to corporate governance and executive pay issues, proposals include that:

  1. in a clamp down on ‘rewards for failure’, the government proposes to strengthen malus and clawback provisions in executive directors’ remuneration arrangements, to identify minimum clawback conditions which would apply in all cases and have a minimum two-year application period after the award is made. These

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