Banks and regulators hope that threats to "claw back" pay if trades later blow up will rein in risk taking on Wall Street, but bankers themselves and compensation experts are not so sure.
Banks and securities firms are toughening rules that give them power to seize pay from employees whose bets or other behavior blows up later. But they still might not be tough enough.
Many U.S. executives opening their 2009 bonus envelopes will find something extra this year: more conditions on whether they can keep their money or stock.
(Update1) Many U.S. executives opening their
2009 bonus envelopes will find something extra this year: more
conditions on whether they can keep their money or stock.
The company embraces a “clawback” policy in which an executive whose misconduct leads to a restatement of financial results will have to give up a portion of a bonus or performance-based pay.
(Update4) Beazer Homes USA Inc., the
homebuilder that last year settled U.S. allegations that it
misstated earnings, said its chief executive officer may be sued
by regulators to recover incentive pay he collected.
Commerzbank will introduce a claw-back option to its bonus system next year as the banking industry aims to stop the short-term risk-taking that helped bring about the financial crisis.
The U.S. pay czar said Monday that he will determine "in the near future'' how he will use his power to claw back pay at companies that have taken bailout money but is not currently in ...
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