Sweeping corporate-reform legislation four years ago introduced the possibility of reclaiming bonuses from top executives when reported income is wiped out by later financial restatements.
However, that option, known as "clawback," hasn't left a scratch.
In part, that's because the Securities and Exchange Commission hasn't felt compelled, for many reasons, to include the provision — Section 304 — in its arsenal of punishments, and the courts have thus far blocked shareholder plaintiffs from recouping bonuses in private lawsuits.
One of the highest hurdles to date, experts say, is that there is a good chance the clawback clause doesn't apply retroactively. Many of the biggest accounting flameouts of recent years — though they may have surfaced after the July 2002 passage of the act — related to shenanigans that took place earlier.
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