The Senate Banking Financial Institutions and Consumer Protection Subcommittee held a hearing today on incentive compensation at large financial institutions, putting pressure on regulators to finalize these controversial Dodd-Frank regulations. Subcommittee Chairman Brown (D-OH) expressed interest in requiring more stringent reforms than those presented last year by the banking agencies, SEC and FHFA in their inter-agency proposal (see FSM Report COMPENSATION23). In contrast, Sen. Corker (R-TN) failed to see the need for more reforms when financial institutions, he said, were already complying with the compensation provisions of the Dodd-Frank Act (see FSM Report COMPENSATION30). A hot topic at the hearing was the degree to which disclosures are sufficient to address hedges that arguably permit risk-insensitive incentives to continue despite nominal bans on specific pay practices.

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