Compensation Clawbacks
Sen. Warren (D-MA) has introduced a revised version of legislation to ensure that both the FDIC and other federal banking agencies can demand that executive and others governing failed banks refund direct and indirect compensation to the federal government. As with Sen. Warren’s prior bill to do so,1 this bill is bipartisan, now also containing compromise language on several points from the prior bill to increase the odds of enactment. For example, the bill would apply only to those at failed banks with assets over $10 billion, making it more difficult to claw back compensation at smaller banks regardless of the level of compensation or nature of the actions of covered persons. Unlike the prior bill, this measure only puts compensation over the past three years at risk rather than capturing all compensation ever received in any form.