November 11, 2019
McGuireWoods London office managing partner and employment lawyer Daniel Peyton examined key considerations for recouping senior executive bonuses under the UK’s clawback rules in an Oct. 25 article published by HR Magazine.
In the article, Peyton detailed ways in which employers may claw back bonuses paid to executives of listed companies under the UK Corporate Governance Code. He cautioned that “any attempt to claw back a bonus payment will fail if there is no contractual right to do so.”
To that end, Peyton outlined considerations to safeguard employers’ ability to contractually clawback executive bonuses, particularly in the event of individual misconduct.
He noted that “having to exercise the right to claw back a bonus payment for failure rather than misconduct will likely reflect as much the failings of a company’s governance processes as those of the individual.”