Senior executives at largest firms would have to defer more than half their bonus pay for four years under proposed regulations
Tens of thousands of Wall Street bankers face tighter restrictions on how they are paid under new rules proposed by U.S. regulators in response to the financial crisis of nearly a decade ago.
The rules are part of a broader effort to curb what regulators say is excessive risk-taking at the country’s biggest financial firms and go beyond senior executives todeal makers and traders who receive large shares of their pay in the form of bonuses.
The proposal on pay is the toughest since 2008, and many on Wall Street say it 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 rules would require the biggest financial firms to defer payment of at least half of executives’ bonuses for four years, a year longer than what is common industry practice. The plan also would require a minimum period of seven years for the biggest firms to “claw back” bonuses if it turns out an executive’s actions hurt the institution or if a firm has to restate financial results.