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Fed Rolls Out Plan to Limit Bank Pay

It works in tandem with pay czar's new compensation rules

By Nick McMaster, Newser Staff

Posted Oct 22, 2009 3:15 PM CDT

(Newser) – The Federal Reserve today officially announced a plan to regulate pay structures at banks, the same day the pay czar rolled out his plan to cap salaries at bailed-out firms. The administration’s double-whammy on compensation marks an unprecedented level of government involvement in the private sector, and the policies that result may be the most enduring legacy of the financial crisis, notes the Wall Street Journal.

The Fed’s plan will create two pay regulation systems, one for the nation's 28 largest bank holding companies and another for thousands of regional and community banks. Within that system, each bank’s compensation rules are likely to be tailored to the institution with the goal of discouraging employees from taking risks for short-term gain. The review of pay structures, and negotiations with regulators will be confidential.

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In this Oct. 1, 2009, file photo, Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill. (AP Photo/Evan Vucci, file)

This Aug. 15, 2007, file photo shows Kenneth R. Feinberg at his office in Washington. (AP Photo/Charles Dharapak, File)

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There's definitely never been anything like this where a government sets pay for a company that's publicly traded.
- JW Verret, professor, George Mason University School of Law

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Fed Rolls Out Plan to Limit Bank Pay

It works in tandem with pay czar's new compensation rules

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executive compensation • Federal Reserve • bank • compensation • financial institutions • risk factors • Kenneth Feinberg

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Feinberg to review compensation for top 25 executives

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But that's not going to change unless Washington steps in

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Company to award Kelly mammoth severance package

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Fed Rolls Out Plan to Limit Bank Pay

It works in tandem with pay czar's new compensation rules

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[Images (2)]

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OTHER STORIES ON OUR RADAR

executive compensation • Federal Reserve • bank • compensation • financial institutions • risk factors • Kenneth Feinberg

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

BP to Gulf Residents: Here's a Bonus ... Now Don't Sue Us!

Feinberg offering $5K to individuals who agree not to sue

17 TARP Banks Paid Execs Billions: Pay Czar

Payments would have violated later guidelines

Pay Czar to Examine Salaries at Bailed-Out Firms

Feinberg to review compensation for top 25 executives

Morgan Stanley Boss: Bankers Are Overpaid

But that's not going to change unless Washington steps in

AIG Attorney Makes Millions by Quitting Over Pay

Company to award Kelly mammoth severance package

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?