A Public Company Instituted a Clawback Policy

question 23

Multiple Choice

A public company instituted a clawback policy.What does this mean?

• A)The company can require the CEO and CFO to reimburse the company for any bonus or profits they received from selling company stock within a year of the release of flawed financials.
• B)At least once every three years,companies must take a nonbinding shareholder vote on the compensation of the five highest-paid executives.
• C)The company is prohibited from expelling shareholders unless the firm pays a fair price for the minority stock and the expulsion has a legitimate business purpose.
• D)The company has decided that the compensation level of its executives is not in the company's best interests,so it reduces all executive pay levels by a certain percentage.

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Definitions:

Premium

The amount paid for an insurance policy or the additional amount above the nominal value of a security or investment.

Motorcycle Gang

An organized group of motorcyclists who may partake in activities ranging from community events to illegal operations.

Insurance Company

An organization that provides insurance policies to subscribers, covering a range of risks in exchange for premiums.

Fire

A rapid oxidation process that generates heat, light, and various reaction products, often used for energy or seen as a risk for damage.