22 Clawback

The introduction of the clawback powers to recover that part of the bonus that was paid in error is also not a new power. This has always been possible on the basis of Art. 6:203 DCC. What is more, when Art. 2:135.8 DCC was drawn up it was linked to the already existing Art. 6:203 DCC, which means that the standard used to apply this latter article correctly is identical to that which applies to Art. 2:135.8 DCC, bearing in mind that Art. 2:135.8 DCC is limited to bonuses unduly paid on the basis of incorrect financial information, whereas Art. 6:203 DCC covers every type of undue payment. The clawback power thus generates little or nothing that is new. The question why Art. 2:135.8 DCC was ever introduced can rightly be asked.

In my view it has three distinct advantages. The fact that Book 2 DCC explicitly states that a bonus paid unduly can be recovered is a very clear signal to supervisory boards. Thanks to the inclusion of Art. 2:135.8, the clawback of bonuses paid unduly has become the norm from which supervisory boards may occasionally depart. In addition, it states explicitly that the clawback power does not depend on the answer to the question of whether the executive was aware of the fact that the bonus was unduly paid. This gives supervisory boards tools to weigh whether there are sufficient grounds to recover part or all of the bonus. I can imagine that this simplification of the assessment framework increases the chance that bonuses will be recovered.

Continuing along this line of thought, I would like to argue that the members of a supervisory board who decide not to recover an unduly paid bonus would be more likely to be held personally liable for this as a result of the clawback power being more explicitly set out in Art. 2:135.8. Under ‘financial restatements’ in particular, supervisory boards must be alert and check whether the changed figures will have any effect on bonuses already paid out.

Third, the possibility to appoint a special representative gives the general meeting a new power to ensure that an unduly paid bonus is actually recovered.

Despite the high expectations, I have not been able to discover any further added value. The ‘solution’ offered by the clawback power does not in my opinion justify the song and dance that accompanied its introduction.