When American International Group agreed last month to a pay package for its new CEO, Robert H. Benmosche, it included some standard items of big-time CEO compensation: an annual $3 million in cash and $4 million in stock, as well as $3.5 million in incentive pay. But the package also included something else: a clawback provision that said his bonuses and incentive pay could be recovered by the company if the payments were based on “materially inaccurate financial statements.”

Such clawback provisos are becoming an increasingly common part of executive pay packages, both within the financial-services industry and with many large nonfinancial companies. According to Equilar, a Redwood Shores, California-based compensation research firm, 64.7 percent of the companies in the Fortune 100 had clawback provisions as part of their compensation plan in 2008, up from just 17.6 percent in 2006. Their use has gained momentum since an uproar earlier this year over the payout of huge bonuses at AIG, despite the company's government bailout.

“I think more and more companies are finding it to be a standard best practice that they are putting into compensation agreements,” says David Sasaki, an Equilar research analyst. “The government’s Troubled Asset Relief Program required firms to have a clawback policy, and that made the public much more aware of them.” The overwhelming majority of recent clawback clauses have been for financial restatements because of executive misconduct, Sasaki said.

Clawbacks may also become part of an international regime for regulating companies after a meeting of G-20 finance ministers in London declared that “effective clawbacks” should be part of “global standards on pay structures.”

The Obama Administration has also highlighted the clawback issue by naming a pay czar, Kenneth Feinberg, to review the pay packages of the top-25 most highly paid executives at seven companies covered by TARP: Citigroup, AIG, Bank of America, Chrysler, Chrysler Financial, General Motors, and GMAC. Feinberg has said he is considering clawing back bonuses at the seven firms, as well as at other firms that received government bailouts, and that he will announce his decisions by October.

“I have the discretion, conferred upon by Congress, to attempt to recover compensation that has already been paid to executives not only in these companies, but in any company that received federal assistance,” Feinberg said.

Among the possible targets of clawbacks; $3.6 billion in bonuses paid to Merrill Lynch employees in December, 2008, while the company, which was acquired by Bank of America, had racked up $27.6 billion in losses. Change to Win, a union-backed pressure group, demand that BofA recover the "premature and undeserved" bonus payments.

But clawing back bonuses such as Merrill’s because a company’s performance turned sour may prove “very hard to do,” says Peter Cappelli, a professor of management at the University of Pennsylvania’s Wharton School. “To figure out in general whether the original deals are flawed—even if there is no outright cheating—raises some complicated ethical issues,” he said. “The deals are essentially contracts that were struck under different circumstances. Do we break the contracts now because the circumstances have changed?”