The XYZ Co.took back performance-based compensation of $1.2 million from their CEO because of his decision of the buyout of another firm that eventually lowered the overall value of the XYZ Co.Which of the following compensation agreements allowed the board of directors to take back this $1.2 million?
A)platinum parachutes
B)clawback provisions
C)phantom stock
D)golden parachute

Question

Quizplus · Accepted Answer

Clawback provisions allow the board of directors to take back previously awarded compensation in certain circumstances, such as a decline in company performance due to the actions of an executive. Platinum parachutes, phantom stock, and golden parachutes are types of executive compensation, but do not typically include clawback provisions.