I have been blogging my darn fool head off about the (i) need for companies to take actions to ensure that they will be able to enforce their clawback provisions when Dodd-Frank Section 954 finally becomes effective, and (ii) desirability of stating in the proxy statement that the company has adopted a compensation clawback policy.

One of our guiding principles to date has been that companies should not put too much effort into fine-tuning a clawback policy at this point, since (i) the issues are many and complicated, and (ii) the SEC and NYSE rules are certain to require a complete rewrite. This could result in different or conflicting policies applicable to different periods. Generally, we have adopted policies that parrot the key language in DF Section 954, but give the Committee the ability to exercise discretion (now, while it still can). By adopting general provisions and referencing the precise terms in DF 954, the Committee (or Board) will have the ability to adjust the meaning and application of its policy as the SEC and the NYSE publish rules. The policy will automatically be in compliance without the need to scramble to make changes.

Adopting a clawback policy now allows the company to affirmatively state in its proxy statement that it has "implemented a compensation clawback policy in accordance with Dodd-Frank" and best practices (and earn the good governance points that accrue therewith), while preserving the company's ability to customize the policy in the future when there is guidance.