Clawback Clauses in Executive Board Contracts

Former Institute research assistant Christian Stemberg examines the widely witnessed phenomenon of clawback clauses in his recently published dissertation. His study explores the reasons behind the success of these contractual provisions and considers their potential benefits.

Clawback in this context refers to a corporate firm’s demand for repayment of variable remuneration that has previously been paid to an executive board member. Stemberg approaches the topic from various viewpoints, employing empirical, comparative, and law and economics perspectives and also considering relevant legal doctrine. After providing a legal classification of clawback clauses, the author conducts an empirical study analysing their prevalence among listed German companies. He finds that they have rapidly increased in Germany in recent years. Stemberg investigates the causes of this “clawback boom” and addresses legal concerns regarding their admissibility and enforceability in Germany. While their permissibility under corporate law is now largely undisputed, questions remain, particularly under the law governing general terms and conditions (AGB law). Stemberg concludes with proposals addressing these concerns. He also examines whether clawback clauses have the potential to contribute to the establishment of a long-term and sustainable remuneration structure for listed companies within the meaning of § 87 (1) of the German Stock Corporation Act (AktG).

Dr. Christian Stemberg studied law at the Universität Münster, inclusive of a period abroad at Temple University Beasley School of Law in Philadelphia. He was a Friedrich-Ebert-Stiftung scholarship recipient and was later engaged as a student assistant at the Universität Münster. From 2020 to 2024 he was a research assistant at the Institute, with part of this period spent on a research stay at the University of Cambridge that served toward the completion of his dissertation. In 2025 he received his doctoral degree from Bucerius Law School. He has been employed as a judge since 2024.

Image: © Max Planck Institute for Comparative and International Private Law