Fed getting tough on pay

September 18th, 2009  |  Source: CNBC

Wow, the Fed is taking what would appear to be a very hard line on pay practices at the top 25 banks. It has floated plans to scrutinize–and reject if it deems necessary–pay practices at these banks, including pay for many employees, not just the top earners.

Pay packages would require approval in advance from the Fed. This has the feel of a trial balloon to some extent. It will not go over well on Wall Street, but the industry has certainly brought a lot of criticism and anger on itself. It will like rely on claw backs and long-term incentives. These were ideas that top banks were embracing anyway. So the impact may be more symbolic than substantive. Still, it is eye-catching. 

By Jim Kim on FierceFinance.com

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