Executive Compensation Regulation - Incentive-Based Compensation Arrangements
|Proposal Date||Comment Deadline||Final Rule Issue|
|April 14, 2011||May 31, 2011||TBA|
- Incentive-based compensation annual reports would be required of qualifying institutions.
- Excessive compensation encouraging inappropriate risk-taking on the part of executives and/or resulting in losses by the institution would be prohibited.
- An additional threshold of $50 billion for certain institutions would be added, and requirements such as the "deferral of incentive-based compensation of executive officers and approval of compensation for people whose job functions give them the ability to expose the firm to a substantial amount of risk" would be enforced.
- Compliance policies and procedures regarding incentive-based compensation would be created and enforced.
Annual reports would include the following information:
- "A narrative description of the components of the firm’s incentive-based compensation arrangements;
- A succinct description of the firm’s policies and procedures governing its incentive-based compensation arrangements; and
- A statement of the specific reasons as to why the firm believes the structure of its incentive-based compensation arrangement will help prevent it from suffering a material financial loss or does not provide covered persons with excessive compensation."
The proposed rule, as it appeared in the Federal Register on April 14, 2011, can be found below.