Clawback

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Related to clawing back: underperforms

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.
References in periodicals archive ?
Some would argue that clawing back part of the National Child Benefit from parents on welfare creates an incentive to work.
A national newspaper said yesterday MGR Capital, a subsidiary of Phoenix Venture Holdings, had had its balance sheet boosted after clawing back pounds 16 million from HM Revenue & Customs following a change in the VAT laws affecting car leasing.
Thousands of families have been suffering after the Inland Revenue started clawing back overpayments from their benefit cheques.