Clawback

A dividend clawback is an arrangement whereby the equity owners commit to use dividends they have received in the past to finance the cash needs of the project or corporation in the future. Clawback has a more general definition. For example, premiums paid on an insurance policy may be refunded (or clawed back) if the policy is cancelled in a certain time frame. Such an arrangement is specified in the contract and referred to as a clawback provision.

Clawback

1. A drop in a security's price after a previous rise.

2. Money that must be refunded or given back for some reason or other. The term especially applies to tax advantages extended to a taxpayer subject to certain conditions that the taxpayer did not fulfill.

clawback

1. A provision in an incentive stock option that requires an employee to reimburse the company for any gains from exercising options in the event the employee goes to work for a direct competitor within a specified number of months of exercise.

2. Excessive management share of profits that must be refunded to investors of a venture capital fund. A clawback is required when managers of a venture capital fund take a contractual share of early investment gains that are subsequently reduced by losses.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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References in periodicals archive

Furthermore, past IRS and court rulings have been inconsistent in determining whether to allow taxpayers to use IRC [section]1341 in situations similar to a clawback repayment.

CLAWBACKS' TAX HEADACHE: Clawbacks are designed to serve justice to unethical senior executives, but the tax implications can be complicated

Clawback trials are scheduled in February and March 2019, and there are more to come.

Jury awards $3.5M in first Petters clawback trial

The regulator had previously ordered the company to share such determined amounts with consumers but KE filed civil suits against these decisions and implementation of clawback mechanism was suspended by the Sindh High Court to the extent of quarterly adjustments.

Regulator orders K-Electric to reduce tariff by Rs1.17

Nepra again redetermined the EBIT by including Rs14 billion which was subtracted by K-Electric from its earnings due to profit clawback mechanism and depreciation because of revaluation of assets by Rs2.707 billion in its financial statements for FY 2014-15.

Nepra directs K-Electric to decrease tariff by Rs1.172 per unit

Other judges have refused to allow a receiver or trustee's clawback power to extend to principal.

Ponzi schemes and controversial clawback claims against investors

Some of the triggering factors not found in the typical clawback policy include general fraud or misconduct, gross negligence (even in a supervisory role), and "seriously poor judgement" if the company suffers extraordinary damage.

The Business Case for Clawbacks

"DIR fees and co-pay clawbacks are serious problems for pharmacies and patients alike," said NCPA chief executive officer B.

Pharmacists irked over PBM fees

The practice of buy-outs has the potential to undermine the effectiveness of the current remuneration rules because when a new employer buys-out an employee's cancelled bonus, the individual becomes insulated against the possibility of their awards being subject to ex-post risk adjustments through the application of either malus (the withholding or reduction of unpaid awards) or clawback (the recouping of paid awards), meaning that through the practice of buy-outs, individuals can effectively evade accountability for their actions.

Tougher rules on bonus buy-outs proposed by Bank of England

KE prayed to declare the decision of Clawback as illegal and unlawful.

NEPRA provides Rs. 5.5 bln relief to K- Electric consumers

While it has considered matters of "say-on-pay" votes, disclosures and the ratio of executive pay to employee pay, the SEC is now considering another matter: so-called "clawback" provisions.

SEC ponders 'clawback' provisions