U.S. Regulators Propose Rules on Incentive-Based Compensation Arrangements at Large Financial Institutions
On February 7, the FDIC issued proposed rules governing incentive-based compensation arrangements at major financial institutions with consolidated assets of at least $1 billion. The proposed rules impose prohibitions on compensation arrangements that encourage inappropriate risks and also establish new reporting requirements. The same rules are expected to be proposed by the other major banking and financial regulators, including the Federal Reserve, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Securities and Exchange Commission.