In the UK, the Guardian reports that Tesco has adopted a new policy that would enable it to "claw back" bonuses from senior executives for five years if it is discovered that they have misstated financial results or done anything damaging to the company's reputation.
The policy, the story notes, is a response to the company having to pay out the equivalent of more than $3 million (US) to its former CEO and finance director and then finding out that a $400 million (US) accounting scandal had occurred on their watch, subjecting Tesco to a series of investigations into its practices.
The story says that "Tesco, which tried but failed to withhold the payments while it carried out an investigation into the accounting scandal, said it would seek to recover the payments if either was found to have been guilty of gross misconduct."
The policy, the story notes, is a response to the company having to pay out the equivalent of more than $3 million (US) to its former CEO and finance director and then finding out that a $400 million (US) accounting scandal had occurred on their watch, subjecting Tesco to a series of investigations into its practices.
The story says that "Tesco, which tried but failed to withhold the payments while it carried out an investigation into the accounting scandal, said it would seek to recover the payments if either was found to have been guilty of gross misconduct."
- KC's View:
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What really amazes me is that it hasn't always been the policy that these bonuses could be clawed back. In the case of Tesco, it should not just apply to former CEO Philip Clarke, but Sir Terry Leahy, the CEO who preceded him and created the house of cards that fell apart under Clarke's watch.
