Bair Supports Reining in ‘Eye-Popping’ U.S. Banker Compensation

[Heidi]

Source: Bloomberg

Aug. 6 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair, citing “eye-popping” salaries at U.S. banks, joined House Democrats and the New York attorney general in seeking tougher compensation standards for lenders.

Bank regulators should use their authority to set pay standards that are “principles-based,” without establishing specific limits, Bair said in an interview in her Washington office yesterday with Bloomberg Television. Guidelines should cover workers such as mortgage brokers along with top executives, she said.

“I’m not sure I buy this, that all these eye-popping salaries are necessary to keep folks for competitive reasons,” Bair said. “We do need to revamp the system to make sure that the incentives are long-term.”

Bair is weighing in on the debate in Washington for more government involvement in shaping pay packages at U.S. firms, which some lawmakers have blamed for encouraging reckless risk- taking that contributed to the financial crisis. Changes would be part of legislation Congress is writing to revamp industry rules to prevent future crises.



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