New Rules Curbing Wall Street Pay Announced
April 21 2016 - 10:40AM
Dow Jones News
WASHINGTON—U.S. regulators on Thursday released proposed Wall
Street incentive-compensation rules that would place stricter
limits on top executives' pay.
The proposal, in the works for five years and jointly written by
six agencies, would overhaul how pay is crafted for a wide swath of
high-level employees at banks, investment advisers, broker dealers
and credit unions, as well as top managers at mortgage-finance
companies Fannie Mae and Freddie Mac.
Under the rules, senior executives at the largest institutions
would have to hold back more than half of their pay for four years,
more than the three years that has become common practice in the
industry. The move would provide firms up to seven years to "claw
back" bonuses if it turns out an executive's actions hurt the
institution. Though financial institutions already use clawbacks,
the proposed rules would codify them for the first time as a
government policy to revoke top officials' incentive pay if firms
have to reinstate financial results.
New details of the plan were released publicly Thursday at a
board meeting of the National Credit Union Administration. Five
other regulators, including the Securities and Exchange Commission
and the Federal Deposit Insurance Corp., are expected to vote on
the measure in the coming weeks. All six regulators were involved
in crafting the proposal released Thursday, and all six will have
to sign off on the final version of the rule for it to become
binding.
The comment period ends July 22.
Write to Donna Borak at donna.borak@wsj.com and Andrew Ackerman
at andrew.ackerman@wsj.com
(END) Dow Jones Newswires
April 21, 2016 10:25 ET (14:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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