Clawing Back Bankers' Pay: Why It's Harder Than It Looks

The transcript discusses the complexities of clawback procedures, particularly in retrieving unvested awards from executives. It highlights the challenges companies face, such as legal hurdles and the decision to cancel future awards instead. The discussion includes examples of executive compensation, notable clawback cases like JP Morgan's London Whale, and the distinction between bonuses and malices. The transcript also addresses the hesitations boards face in implementing malice policies despite reputational harm, questioning why these options are not more frequently utilized.

What is a common alternative companies use instead of accessing employees' bank accounts?

• Increasing employee salaries

• Providing additional bonuses

• Cancelling or depleting unvested awards

• Offering more stock options

What is the main purpose of a malice policy in executive contracts?

• To reclaim unvested awards if reputational harm is caused

• To increase the value of stock options

• To protect executives from legal issues

• To reward executives for good performance

Which major financial institution was involved in a significant clawback case?

• Bank of America

• JP Morgan

• Citibank

• Goldman Sachs

What is a major reason boards hesitate to implement malice policies?

• Lack of legal support

• High legal fees and time consumption

• Fear of losing executives

• Insufficient evidence of wrongdoing

What perplexed lawmakers about the use of malice policies?

• The complexity of the policies

• The lack of action despite reputational harm

• The potential for executive backlash

• The high cost of implementing them