In the attached letter, AFR praises the Securities and Exchange Commission’s proposal to require the recovery of erroneously awarded executive compensation as a condition for exchange listing. “We urge the SEC to maintain core aspects of the rule proposal,” the letter states. “Particular strengths of the rule proposal that should be preserved in the final rule include: The mandatory requirement to recover erroneously awarded compensation, unless such recovery is documented to be highly impractical or illegal under the laws of the home country. This accords with the statutory language in Section 954 of the Dodd Frank Act which specifies that the issuer will recover such compensation. The no-fault nature of the recovery requirement. Clawback is required not because the executive is at fault, but because the compensation was awarded erroneously. In addition to being more fair and effective, we believe the no-fault nature of the recovery will act to eliminate any inappropriate personal stigma on executives subject to the requirement. Finally, this provision was clearly intended to go beyond Section 304 of Sarbanes-Oxley, which already requires clawback due to top executive misconduct. The application of the clawback requirement to all Section 16 executive officers. The Section 16 definition of executive officer appropriately captures all executives with a significant role in generating financial results. A narrower definition of executive officer would result in individuals with a significant executive role within a company being excluded from clawback requirements. The prohibition on indemnification of executive officers subject to clawback. Permitting indemnification would effectively nullify the mandatory... More