The Obama administration is looking into ways it could change the way financial companies compensate employees, according to a report.
The administration’s effort, in its early stages, is considering various options, including using the Federal Reserve’s supervisory powers, powers of the Securities and Exchange Commission, and moral persuasion, people familiar with the matter told the Wall Street Journal. The administration is also looking for legislative solutions, the report states.
The changes would push for requiring that compensation be more closely aligned with long-term performance.
The Fed rules could limit bank’s payment practices to ensure that the “safety and soundness” of the bank would be maintained, according to the report. The administration is also looking into drawing up “best practices” to guide companies in structuring pay.