SEC Votes to Restrict Wall Street Bonuses

by Derek Loosvelt | March 02, 2011

Mary Schapiro and the rest of the SEC might soon wield a ton more power on Wall Street.

Today, the SEC passed a proposal requiring large banks, asset managers and hedge funds to "disclose their bonus figures to the SEC, which could then ban any 'excessive' awards." The proposal, which narrowly passed SEC vote (it won 3-2, with two Republicans voting nay), "will now enter a 45-day public comment period, after which the commissioners must vote on a final version of the rules."

The move, one of many proposed today by the SEC, followed a similar one in January when the SEC "enacted so-called 'say on pay' rules that give shareholders a nonbinding vote on corporate salaries, bonuses and golden parachutes."

In the past two years, since that pesky little financial crisis thing nearly crushed the world's economies, Wall Street bonuses have come under white-hot fire, as many industry observers (including this one) believe incentive pay was largely responsible for the excessive risk taking that led to the crisis.

Of course, the big banks (such as Goldman Sachs and JPMorgan Chase), asset managers and hedge funds that stand to have to answer to the SEC if the aforementioned regulation passes would disagree these observers, and are no doubt, right now, readying their full-court lobbying presses to get that message out over the next month and a half.

(DealBook)

Filed Under: Finance


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