ERISA and Global Benefits
You Can Bank On Your Incentive Pay - Eventually: Proposed Regulations Would Require Sweeping Changes
By Stephen Harris, Eric Keller & Mark Poerio
The 2010 Dodd-Frank Act gave sweeping power to federal banking regulators to reduce perceived systemic risk, including the mandate of Section 956 to prohibit certain insiders from receiving excessive “compensation, fees, or benefits” that could lead to material financial loss to covered institutions. Last week, newly-proposed rules were released.
Our alert provides highlights of the proposal—from how they would apply to financial institutions having at least $1 billion of assets, to mandatory deferral periods and minimum clawback rights. Those who shape executive compensation should consider the proposed regulations, because they could not only bind banks but fuel the general trends toward greater governance controls and longer-term, performance-based pay.