WASHINGTON — The Federal Deposit Insurance Corp. board has voted 5-0 for a measure to require financial firms to limit and defer executive compensation to curb the risk-taking blamed for sparking the credit crisis.
The proposal is to compel firms to spread at least 50 percent of incentive-based pay over at least three years and to subject packages to possible cuts for company losses.
Dodd-Frank, the regulatory overhaul enacted in July, directed agencies to rein in executive pay after losing bets by financial firms sparked the worst financial crisis since the Great Depression. The proposal would align the United States with international standards by requiring firms with at least $50 billion in assets to defer pay for executive officers.
The proposal is subject to approval of the Securities and Exchange Commission, the Federal Housing Finance Agency, and the five agencies that make up the Federal Financial Institutions Examination Council before it can be released for public comment.