Executive Clawback Calculator — Section 954A Dodd-Frank Recovery
SEC Rule 10D-1 (Dodd-Frank §954A) requires listed companies to recover incentive-based executive compensation paid during the 3 years before an accounting restatement. The clawback covers the excess paid based on the erroneous financials — no fault required. Effective October 2023 for NYSE/Nasdaq listed companies.
How Section 10D-1 Clawback Works
Triggered automatically when public company restates financials. Recovery period: 3 fiscal years before restatement filing date. Covered execs: all current and former §16 officers (CEO, CFO, named executive officers). Covered comp: any incentive comp granted, earned, or vested on basis of financial reporting measure. No fault required — even if exec did not know of accounting error.
Calculation Formula
Recovery = excess of incentive comp received over what would have been received based on restated figures. For TSR-based comp: harder to calculate — companies use reasonable estimate methodology. SEC requires written policy documenting methodology. Companies that fail to adopt policy face NYSE/Nasdaq delisting under listing standards effective Oct 2023.
Tax Recovery Under §1341
Exec who repays clawback can claim deduction in repayment year OR amended return for original payment year — whichever produces larger tax benefit (Section 1341 claim-of-right). For high-bracket exec, amended return typically better when original year was higher-rate. Coordinate with tax advisor before repayment.
Source: SEC Rule 10D-1 (17 CFR §240.10D-1), IRC Section 1341 (claim of right), NYSE Listed Company Manual Section 303A.14. Last updated: May 2026.