Fried, JesseShilon, Nitzan2013-11-262011Jesse M. Fried & Nitzan Shilon, Excess-Pay Clawbacks, 36 J. Corp. L. 721 (2011).0360-795Xhttp://nrs.harvard.edu/urn-3:HUL.InstRepos:11339413We explain why firms should have a policy requiring directors to recover “excess pay” – payouts to executives resulting from an error in compensation metrics (such as inflated earnings). We then analyze the clawback policies voluntarily adopted by S&P 500 firms as of 2010 and find that only a small fraction had such a policy. Our findings suggest that the Dodd-Frank Act, which requires firms to adopt a clawback policy for certain types of excess pay, will improve compensation arrangements at most firms. We also suggest how the types of excess pay not reached by Dodd-Frank should be addressed.en-USJournal Article