clawback agreements

Clawback agreements are contracts that allow an organization to reclaim money or benefits previously given to an employee or executive under certain conditions. For example, if a company discovers that a bonus was awarded based on inaccurate financial reports or misbehavior, it can "claw back" that bonus. These agreements are often included in executive compensation packages to promote accountability and discourage unethical practices. They serve as a financial safety net for companies, ensuring that rewards are only given when deserved.