Abstract: The Dodd-Frank Act requires firms to adopt clawback policies for recovering certain types of excess pay-overpayments resulting from errors in performance measures (such as reported earnings). The authors discuss the costs of excess pay to investors and explain why most firms' existing arrangements fall far short of what the Dodd-Frank Act is likely to require. The authors also offer guidance to boards seeking to eliminate the types of excess pay not reached by Dodd-Frank.