Banks Reel In Execs' 200% Bonus Limit to ... 150%
PNC, Capital One among 7 major banks taking action
By Matt Cantor, Newser User
Posted Apr 23, 2013 11:28 AM CDT
In this Friday, May 11, 2012 file photo, a Capital One Bank office is shown in New York.   (AP Photo/Mark Lennihan, File)

(Newser) – 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.

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Showing 3 of 15 comments
Apr 23, 2013 7:42 PM CDT
Man, the 1% & banksters really are different then the 99% lol That white-collar makes all their crimes just m e l t a w a y (lol)
Apr 23, 2013 3:28 PM CDT
The US consuming public is fairly ignorant to the collective power they have... hence, corporations and governments take advantage of them. Why stop at reasonable profits when they can have ever increasing greed?
Apr 23, 2013 1:27 PM CDT
FTA: "a shareholder adviser, who says investors want to ensure banks take 'reasonable risks' to push stocks up." I wonder what their definition of "reasonable risks" is, now? Because the previous definition was, um, incorrect.