US regulators’ bonus compensation proposal

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April 2016


Yesterday, the National Credit Union Administration became the first of six federal regulatory agencies to repropose the long-awaited bonus compensation rule that will apply to banks, asset managers, broker-dealers, and other financial institutions. The issuance follows an earlier joint proposal released in April 2011 which established limitations on the timing—but not the size—of bonus payouts. Compared to the 2011 proposal, the reproposal establishes generally stricter bonus requirements (e.g., longer deferral periods and clawbacks) and applies these requirements to a larger subset of the institutions’ employees.

  1. More employees are subject to bonus regulation.
  2. The reproposal’s main features are bonus deferral periods and clawback requirements.
  3. The codification of bonus terms offers benefits to the CEOs and boards of the largest US banks.
  4. No bonus caps in the US—a global advantage.
  5. Compensation: the final thematic piece of post-crisis reform.

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Dan Ryan

Partner, PwC US

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