Curbing Executive Pay on Wall Street
Last week U. S. Regulators proposed new rules to address issues inherent in how Wall Street executive pay is currently handled. Under the new proposal, senior executives at the largest firms, according to the Wall Street Journal, “…would have to defer more than half their bonus pay for four years…”
The regulation would impact the executive pay of potentially tens of thousands of bankers on Wall Street. In an article by Donna Borak and Andrew Ackerman (Washington) and Christina Rexrode (New York) “… many on Wall Street say it (the new ruling) threatens to exacerbate a flight of talent from the banking sector to other fields such as hedge-fund firms and technology companies that have few limits on what they can pay employees.”
The Washington Post points out that “reining in” Wall Street may not be easy.
“Reining in Wall Street pay has been one of the most complicated, and controversial, parts of 2010s financial reform package approved by Congress, known as the Dodd-Frank Act. A team of regulators, including those from the Securities and Exchange Commission and the Federal Reserve, initially proposed limits to pay and bonuses given to top executives at financial institutions in 2011.”
Critics say the proposal is still not tough enough. President Barack Obama continues to push regulators to wrap up the rules that govern executive pay during his administration.
Read more on the Dodd-Frank Act on the website for the Securities and Exchange Commission.