Strategies for Executive Compensation: Design and Tax Issues for a ...

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operate, the terminated participant would forfeit all previously awarded unvested
mid and long-term incentive awards.” 15
(iv)
Sun Life Financial Inc.
The clawback here applies to all employees, disgorging incentive payments made under
inaccurate financial results with a two year look-back. Interestingly, the policy, adopted
in 2010, includes instances of omission such as any failure to report or take action to
stop misconduct of another employee that an employee knew, or ought to have known,
about:
“New clawback provision for all employees
The board adopted a new clawback provision that allows it to recoup incentive
compensation if an incidence of misconduct led to an overpayment of incentive
compensation. This new provision is consistent with emerging competitive practice
and regulatory principles.
Clawbacks
Our CEO and CFO are required by law to reimburse their incentive compensation if
there is an incidence of misconduct and we need to restate our financial statements. In
2010 the board approved a new clawback policy, allowing it to demand that former or
current employees pay back any or all of the incentive the compensation they received
or realized in the previous 24 months if: employee was involved in misconduct (such as
fraud, dishonesty, negligence or non-compliance with legal requirements or Sun Life
Financial’s policies, any other act or omission that would justify termination of
employment for cause, and any failure to report or take action to stop misconduct of
another employee that an employee knew, or ought to have known, about), and the
15 Proxy filed February 6, 2012