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 ?
During Prime Minister's Question Time, Liberal Democrat work and pensions spokesman David Laws asked Mr Blair whether the Inland Revenue had acted illegally by clawing back cash so quickly.
The clawing back of EU farm money is a regular procedure based on the results of hundreds of audits carried out in the Member States.
TELECOMS group Thus stuck to its full-year targets yesterday after clawing back interim losses.
A TAIWANESE company pulling the plug on 600 jobs are to be investigated by the Executive - with a view to clawing back grants given to the firm.