Will Banks Really Have To Curb CEO Pay?

The government's rules specify that participating banks must claw back payments to senior executives if those payments were "based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate."

But what does "inaccurate" mean? Would these chief executives have to give back cash if their firm took enormous asset write-downs, as has happened time and again in the last year?

"I'm afraid it isn't fully clear to anyone yet," said Howard Sherman, chief executive of Governance Metrics International, a corporate governance ratings agency. "Restatements are clearly identifiable events that can be used as the basis for clawbacks, but there may be other situations where a full or partial clawback is warranted."

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