Deborah Connor spoke to the Anti-Corruption Report about the Department of Justice (DOJ) Criminal Division's new pilot program on compensation incentives and clawbacks, a three-year program requiring companies to implement compliance-related criteria into their compensation and bonus systems when entering into criminal resolutions.
According to Deborah, that the pilot program is not a permanent measure "offers both companies and the DOJ a chance to evaluate how to measure and implement compliance/compensation policies."
While an initiative aimed at holding individual wrongdoers accountable is understandable, companies may face legal repercussions in pursuing clawbacks through the Pilot Program, with Deborah adding that recouping compensation tends not to be a straightforward task.
"There are a range of legal factors to consider when thinking about clawbacks, among them state wage and employment laws provide restrictions on the ability to withhold wages, compensation agreements and severance agreements, tax considerations, and data privacy," Deborah said. "This is in addition to any litigation that might arise between the employee and the company regarding any attempts at clawbacks."
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