Eliminate All Incentive Compensation

By: Craig D. Miller
– American Banker

Arnold Schwarzenegger said, when he was first elected as governor of California, that he wanted to "blow up the boxes" of the state bureaucracy.

The ongoing challenges presented by executive compensation, methods of paying executive compensation and inherent risks associated with certain forms of executive compensation have been a thorn in the side of state and federal regulators and shareholders for close to a decade now.

It is time for us to completely reconsider compensation for banking executives. Let's "blow up" the incentive model and replace it with a fair and equitable compensatory system rooted entirely in base pay.

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