Fearing too much risk-taking, the Federal Reserve has been calling on banks to cut down on the bonuses execs can get for blowing past their financial targets—and some top banks are following through. PNC, Capital One, Discover, and four other major financial firms are doing just that, the Wall Street Journal reports. They're lowering that limit from the previously common 200% of target bonus (say, getting $2 million if the exec was set to receive $1 million and exceeded goal) to 125% or 150% this year.
The Journal's article coincides with the release of a new study that looked at compensation at 23 of the largest financial-services firms; it found that big banks including Bank of America, Goldman Sachs, and Wells Fargo were in the 125% to 150% range this year and last year. Investor groups, however, are wary. "There is some tension between the Fed's focus, which is on risk mitigation, and the focus of investors," says a shareholder adviser, who says investors want to ensure banks take "reasonable risks" to push stocks up.