Guidance on Sound Incentive Compensation Policies

OMB 1557-0245

OMB 1557-0245

Incentive compensation practices in the financial services industry contributed to the financial crisis that began in 2007. Bank employees too often were rewarded for increasing short-term revenue or profit without adequate regard to the risks taken to achieve those results. These practices exacerbated the risks and losses at a number of banking organizations and resulted in the misalignment of the interests of employees with the long-term safety and soundness of their organizations. The guidance was issued to assist banking organizations in designing and implementing incentive compensation arrangements that do not encourage imprudent risk-taking and that are consistent with the safety and soundness of a banking organization.

The latest form for Guidance on Sound Incentive Compensation Policies expires 2023-04-30 and can be found here.

OMB Details

Recordkeeping Requirements for Large Banks

Federal Enterprise Architecture: Economic Development - Financial Sector Oversight


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