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Divorce Clawbacks

Listen, girls... be careful about timing when it comes to that settlement. Strike the wrong balance between the cash bonus and more incentive aligned, long-term compensation in the deal and you might find yourself the subject of Divorce Settlement Clawbacks. Or perhaps, Alimony Modification.

A City fund manager hit by the credit crunch went to the Court of Appeal today in an attempt to secure a cut in the £9.5 million divorce settlement he made to his former wife.
Bryan Myerson claimed that his former wife, Ingrid, was awarded 43 per cent of the couple's £25.8 million fortune when the settlement was agreed in February last year.
She was awarded £9.5 million cash, but he took most of his shares in the couple's stocks in Principle Capital Holdings, where Mr Myerson worked as a fund manager.
Since, the share price has plummeted by 90 per cent and the divorce, as it stands, leaves Mrs Myerson with 105 per cent of the couple's assets while her former husband, who still owes her £2.5 million in cash, would have to borrow money to pay her.

I say tough cookies Bryan. You were the one who elected to take your share in equities. Now we are supposed to give you a free put option to boot? Not to mention, that once you modify these terms, if the shares recover, Bryan is going to be sitting pretty and the Mrs. will be the one looking for modification.
City tycoon pleads poverty in £10m divorce [Times Online]


Clawbacks Watch '13: Barclays

Those Libor fines don't pay for themselves!

Clawbacks Watch '12: Deutsche Bank

Those shares DB awarded you to make up for the ones you were leaving with your old employer? They're going to need those back. Deutsche Bank has become the first global bank to introduce rules allowing it to strip staff of bonuses they earned at previous employers in the latest crackdown on pay. The largest European lender by assets has significantly tightened its bonus rules this year, enabling it to take back unvested shares that newly hired senior staff received in exchange for stock earned at another bank. The German banks’ stricter bonus rules, which came into force in January, apply to all new senior hires considered to be involved in the bank’s risk-taking, a spokesman said. These more than 1,300 “regulated employees“ include managing directors in the corporate and investment bank and members of the management committees of all other units. One recruitment expert warned the rule could make it harder for Deutsche Bank to attract senior talent as the potential job candidates might not be willing to put at risk stock earned at a previous bank. Deutsche Bank Turns Screws On Bonuses [FT]