White Collar Pay Clawbacks Pushed by DOJ Put Companies in Bind

The Justice Department will begin rewarding companies who claw back pay from employees involved in white-collar crime in a bid to improve corporate culture that thrusts prosecutors onto new and legally ambiguous terrain.

Deputy Attorney General Lisa Monaco announced this month that prosecutors—in evaluating a company’s compliance program to determine potential charges for crimes such as securities fraud or bribing international officials—will begin assessing whether it financially penalizes employees “whose direct or supervisory actions or omissions contributed to criminal conduct.”

DOJ’s objective is to deter corporate crime by pushing clawback policies into the mainstream, after they’ve applied in far more ...