The U.S. Justice Department has a new plan to address corporate crime and the costs of that kind of crime to shareholders. Deputy Attorney General Lisa Monaco said the department’s criminal division will cut fines by certain percentages if the company pushes the corporate wrongdoers to pay for their wrongdoing.
This would happen when companies agree to include compliance goals as part of compensation and bonus agreements with corporate officials. “Our goal is simple: to shift the burden of corporate wrongdoing away from shareholders, who frequently play no role in misconduct, onto those directly responsible,” Monaco told a recent American Bar Association meeting.
Justice Department spokeswoman, Marshall Miller expanded on Monaco’s comments.
“Clawbacks are not a new idea but our view is that they have never really been deployed effectively or regularly,” Miller said and noted the plan is a three-year pilot program to give discounts that are tied to the size of the clawback. And, as long as the effort is in good faith, the discounts will be given even if the clawback is unsuccessful.
“If you are going to create a culture that calls out misconduct and promotes compliance, you need people to have skin in the game,” Miller said.
Source link: Insurance Journal — http://bit.ly/3IZthGH