The number of public companies flagging executive compensation clawbacks under SEC Rule 10D-1 has declined noticeably during the first half of 2026, new analysis shows.
Data compiled by Olga Usvyatsky of Nonlinear Analytics LLC found that 142 companies checked the error-correction box in their annual filings during H1 2026, down from 169 during the same period in 2025.
The decline was driven primarily by a slowdown in the first quarter, with second-quarter activity remaining broadly steady year over year.
In Q2 2026, 39 companies reported an error correction in their filings, compared with 40 companies during Q2 2025, suggesting the trend is stabilising rather than accelerating.
Usvyatsky’s analysis concludes that the drop in disclosures largely tracks a broader slowdown in restatement activity, rather than any fundamental shift in how companies are applying the clawback rule itself.
A growing number of companies also disclosed that their clawback recovery analysis had not been completed by the time of filing, with four companies in that position during H1 2026, up from two in the first half of 2025 and none at all in the first half of 2024.
SEC Rule 10D-1, often called the compensation clawback rule, was created under the Dodd-Frank Act and requires public companies to adopt policies recovering excess incentive pay tied to later-restated financial results.
The rule applies to both material restatements, known as “Big R” restatements, and immaterial ones, referred to as “little r” restatements, regardless of whether the underlying error involved misconduct.
Companies subject to the rule must flag corrections on the cover page of their annual reports, explain any recovery efforts, and include their clawback policy as an exhibit to the filing.
The analysis draws particular attention to the relatively small number of cases where an immaterial restatement leads to an actual compensation clawback, noting these instances deserve closer scrutiny.
Usvyatsky writes that while a no-fault recovery following a “little r” correction does not, by itself, indicate misconduct or aggressive financial reporting, it may signal something worth watching in how executive pay is structured.
Specifically, it “may signal that executive incentive plans are built around ambitious performance targets, where relatively small changes in reported financial results can materially affect payout outcomes.”
The analysis notes that such compensation structures can align executive interests with shareholders by rewarding demanding goals, but they carry a corresponding risk of encouraging aggressive business practices or optimistic accounting judgements.
The quarterly update is part of an ongoing series tracking compliance trends, SEC comment letters, and the complexities of recovery analysis under Rule 10D-1 across publicly listed companies.