FDIC To Top Financial Execs: You'll Have To Wait To Collect Bonuses

[ProSense]

Source: Huffington Post/AP

WASHINGTON (AP, By Marcy Gordon) -- Federal regulators have proposed making top executives at large financial firms wait at least three years to be paid half of their annual bonuses, a move designed to cut down on risky financial transactions.

The Federal Deposit Insurance Corp. voted Monday to advance the rule, which builds on more general requirements in last year's financial regulatory law to curtail risk-taking. The rule targets firms with $50 billion or more in assets, seeking to tie bonuses with financial performance over a longer time period.

The FDIC also moved Monday to make larger banks pay a greater portion of fees to insure all U.S. banks.

The bonus requirement would apply to major financial institutions, such as Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc., and Wells Fargo & Co.



Read more: http://www.huffingtonpost.com/2011/02/08/fdic-bonuses_n_820104.html

[Skink]

1. After 3 years they get paid every year

[ProSense]

2. From the proposal

...At these covered financial institutions, at least 50 percent of the incentive-based compensation of an “executive officer” (as previously defined), would have to be deferred over a period of at least three years. The Proposed Rule also requires that deferred amounts paid be adjusted for actual losses or other measures or aspects or performance that are realized or become better known during the deferral period.

PDF

[Earth_First]

3. LMFAO-ROTFL

:rofl:

Riiiight...

[ProSense]

8. "Riiiight..."

Unbelievable that the FDIC has any power, right?

[decidedlyso]

4. Oh, puhleeze...

[ProSense]

9. What does that mean? n/t

[decidedlyso]

14. Federal regulators have proposed? ... As long as corporations are

running the country regulations such as these will 1)either not be put into place, or 2)will lack any teeth to be enforced. These propositions are basically "feel-good" remedies to appease a wary public. Why are the banks that perpetrated fraud on unsuspecting homeowners and investors, including other countries like Ireland and Greece, still in business, or being run by the same Jamie "food stamp king" Dimons of the world? Tell me B of A has lost its charter--that would be real change.

[ProSense]

15. "As long as corporations are

running the country regulations such as these will 1)either not be put into place, or 2)will lack any teeth to be enforced."

The proposal was voted on and approved by the FDIC. The argument that regulations don't work doesn't hold water. There are a lot of regulations that do work. The FDIC has never been accused of being weak in enforcing the powers it has. The new powers it has been given will make it stronger.

[decidedlyso]

16. Nope, it won't. But to argue about that now is stupid. If this were

1937 and I saw any ethics, integrity or fortitude in government officials, I would be more sanguine about your position. But I do not see that, nor do I believe I will. Later this year, you'll feel the same.

[ProSense]

17. Not likely.

The fact is that many have been calling for the government to enact tougher regulations. Claiming that such regulations don't work is counterintuitive.

Again, the FDIC is one of the more effective agencies.

[Deep13]

5. Uh-oh! Better call a waaahmbulance!

[RickFromMN]

6. How is this different than the way stock options work for "key" people?

I could be wrong, but I thought corporations structure stock options to mature gradually.
This gradual maturation is to keep "key" employees and to control "key" employees.

I thought "key" employees get stock options each year, which they can exercise in 3 to 5 years.

If I were a corporation, I'd love this rule. It would be one more way to keep and control "key" employees.

Each year, I'd give them a bonus they can't collect unless they stay with me 3 more years.
After 3 years, they'd get the first year bonus award, and then a bonus every year thereafter.

If I, as a corporation, got upset with a "key" employee, I'd fire them so they wouldn't get the bonuses
that have not "matured" just as they wouldn't get the stock options that have not "matured".

I would think corporations would welcome this rule.

Unless the corporation were forced into bankruptcy, and its employment contracts voided,
how could this rule help us who pay when corporations, too big to fail, make risky decisions?

[ProSense]

10. Bonuses are a package

not just stock options.

[ProSense]

7. This should also be noted

Wall Street reform gives regulators power over executive pay

Teamsters Applaud SEC's Navistar Decision Upholding Dodd-Frank

[FreakinDJ]

11. Good Move

now if only they would Tax the Shit out of them

[Javaman]

12. Meh. In the end, they still get the money.

So what does this do? It forces the people getting the bonuses to put off getting that addition to their beach house in the Hampton's for 3 years.

That really showed them, didn't it?

LOL

faux display of power.

[ProSense]

13. That is not

all it does.

Big Banks to Pay More to Insure Deposits

By ERIC DASH

Big financial institutions will pick up a greater portion of the cost to protect deposits when banks fail, under a plan adopted Monday by federal regulators.

The new fee structure, which takes effect in April, will result in about 110 large banks covering about 80 percent of the premiums paid into the government’s deposit insurance fund each year, up from 70 percent. The fund, administered by the Federal Deposit Insurance Corporation, is expected to collect $14 billion in premiums this year.

The change, approved unanimously by the five-member board of the agency, was a result of the Dodd-Frank financial regulations that passed last year. Addressing complaints by small banks that they were taking on too much of the financial burden to save failing banks, the law directed the F.D.I.C. to re-evaluate the fees according to the value of assets held by each bank, instead of the level of deposits.

Even before the collapse of hundreds of small and midsize banks caused the agency’s fund to slip into the red in the fall of 2009, lawmakers and federal regulators had proposed overhauling the way deposit insurance fees were assessed.

more

[drm604]

18. I can't believe some of the responses in this thread.

So we shouldn't bother with regulations?

Hell, let's just deregulate everything since regulations don't work anyway. :sarcasm:

[rfranklin]

20. I think the cynicism is justified...

since we see the banksters and Wall Street crooks skate scot free in so many cases.

And they often figure out clever ways to make an end run on regulations.

[drm604]

21. Fine

Let's all become Republicans and not support regulation. Why are we on DU if we think it's hopeless? Why even bother to vote? None of it will work anyway. :sarcasm:

[rfranklin]

22. It usually doesn't...

and like a dope I vote and hope every time.

[whatchamacallit]

19. Great, but if I was a betting man, I'd bet Obama won't support it (nt)

[Thor_MN]

23. Runaway Executive wage inflations means not enough executive talent means more executive visas

needed to bring foreign executive talent to fill the executive roles that corporations can't find enough US talent for, right?

It worked to bring middle class wages down, why shouldn't it work for executives?