Incentive-Based Compensation: FDIC Proposal Will Lock Up Payouts

By: Ellen R. Marshall
– BankNews

With considerable fanfare, the FDIC passed and then quickly announced its proposed rules implementing Section 936 of the Dodd-Frank legislation – even before the other regulatory agencies could put their own imprimatur on the jointly developed proposal.

The proposal takes some interesting approaches to its subject. The aspect that has received the most media attention is the part that applies to the largest banks. For financial institutions with $50 billion or more in consolidated assets, the proposal would require that, for any executive employee who receives incentive-based compensation, at least half of that must be in a form that is paid at least three years after it is earned.

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