CEOs in the earlier years of their services tend to have greater ability uncertainty and career concern and inflate earnings to influence their perceived ability (Graham et al. 2005; Ali and Zhang 2015). This study finds that clawback provisions (i.e., an ex-post setting up mechanism that enables boards to recoup excess pay based on misstated earnings) can mitigate financial misreporting for shorter-tenured CEOs relative to longer-tenured CEOs. This study also finds that CEO total pay becomes less sensitive to a decline in return on assets after firms whose CEOs are in the earlier years of their services adopt clawback provisions, suggesting that boards shield these CEOs’ pay from adverse change in accounting performance to a greater extent as clawback provisions make it costly for these CEOs to misstate earnings to mitigate the negative effect of poor accounting performance on their perceived ability.