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Client Alert: Federal Reserve's Proposed Guidance on Sound Incentive Compensation Programs

In October 2009, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) issued proposed guidance (the “Proposed Guidance”) designed to help ensure that incentive compensation policies at banking organizations do not encourage excessive risk-taking and are consistent with the safety and soundness of the organization.  Although the Proposed Guidance is subject to public comment and, therefore, still may be revised by the Federal Reserve before being finalized, the Federal Reserve has separately indicated that it expects banking organizations to immediately comply with the Proposed Guidance.

BFKN's Compensation and Employment Group has prepared the attached Client Action Alert to outline the Federal Reserve's proposed guidance and to recommend action steps.  Please click below to read the Alert.

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