After the conviction of a former executive for possessing child pornography on a work-issued laptop, W.W. Grainger, the industrial supply company, has been granted the right to recoup more than $1.5 million in incentive compensation. This victory was awarded in the U.S. District Court for the Northern District of Illinois, under the auspices of Judge Sara L. Ellis.
The executive in question, Scott Witz, formerly held the title of vice president of total rewards within the company. Grainger pursued a recoupment of $1.38 million in equity-based awards and approximately $295,782 in cash incentive payments as part of their management incentive program. This action was enabled by clauses in the plan and award agreements which explicitly allow for recoupment in cases of employment misconduct, including criminal activity and violations of company policy.
This legal victory for Grainger is a potent example of corporate incentive packages including clauses that protect the company’s interests in cases of serious employee misconduct. Such provisions appear to be fortunately rare but prove to be crucial when the situation arises.
To learn more details about this case and its implications, you can refer to the
May 13 opinion issued by Judge Ellis. You can also check the original reporting on this case at
Law.com.