US managers who make mistakes will have to return the millionaire bonuses: the turning point of the Sec

The new US regulation

Managers of American public companies will lose their millionaire bonuses if they commit accounting errors or fraud in corporate balance sheets. This is required by a new regulation approved at the end of October by the Securities and Exchange Commission (Sec), the supervisory body on the American stock exchange. The rule passed by a majority, with the favorable vote of the three democratic components of the SEC and the opposite vote of the two republicans. The novelty was foreseen by a law of 2010, but so far the SEC had not issued the implementing devices. The final version of the rule is broader than the 2015 proposal, which would have triggered the clawbacki.e. recovery, only in case of mistakeserious accounting re that required a restatement of the financial results of previous years. According to the regulation approved on October 26 by the SEC, the companies will have to recover the bonuses of the executives even if they find smaller errors that concern only the results of the last year. The new rules, which are expected to come into effect next year, require companies to adopt a series of policies to recover incentives mistakenly assigned to both current executives and their predecessors, dating back up to three years earlier.

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