Financial Institution Insights

Executive Compensation in the Banking Industry

Emerging Trends and Best Practices 2016-2017

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Introduction Bank executive compensation practices continue to evolve, as does the regulatory influence on pay programs. Eight years after the Dodd Frank Act was signed, incentive compensation rules under Section 956 of the Act remain outstanding and seem unlikely to…

Lessons From Wells Fargo: Forfeiture and Clawback Policies

The Wells Fargo & Co. sales incentive fraud scandal has further increased the scrutiny on banking industry compensation practices.

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As published in BankDirector.com By: Susan O’Donnell, Daniel Rodda| SEPTEMBER 13TH, 2017 Since 2010, banks have followed the Interagency Guidance on Sound Incentive Compensation Policies and reviewed their incentive plans to ensure they do not motivate inappropriate risk taking. However,…

Rewarding Executives for Successful Bank M&A

Aligning rewards with value enhancement will help shareholders understand the rationale behind them.

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This article originally appeared on BankDirector.com. Mergers and acquisitions (M&A) can create significant value for shareholders. Accordingly, bank executives should be rewarded when completing and integrating successful transactions. However, in today’s environment of heightened executive pay scrutiny, some approaches to…

Bank Compensation and Governance in the New Era

Banks are often under greater regulatory scrutiny than companies in other sectors, and that trend is likely to continue.

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New compensation and governance standards are impacting boards of directors in all industries, but even more so in banking, which has more regulatory requirements and is under greater scrutiny. The recent Wells Fargo & Co. $185 million settlement over alleged…

Executive Compensation in the Banking Industry

Emerging Trends and Best Practices for 2015-2016

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This is Meridian’s third annual white paper on trends impacting the banking industry (see our 2014-2015 and 2013-2014 white papers). Our paper represents data from Meridian’s review of 2015 proxies for U.S. banks with assets between approximately $10 billion and…

How Pay Drives Performance

Meridian analyzes effective pay programs and explains what companies can learn from them.

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High performing banks execute customized strategies that deliver results. They have the vision, leadership, culture and incentive programs that help to attract, motivate and retain top talent. Leaders of high performing banks articulate their strategic direction with laser focus, communicate…

Hot “Banking” Jobs: As Banking Changes, So Are the Job Titles

Banks are finding it increasingly necessary to look beyond a traditional financial services background when attracting new talent.

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Banks today must adapt to a world where “digital”, “cyber risk” and “fintech” are the new business lexicon. As the bulk of the workforce shifts from baby boomer to millennial, there is an increased need to attract talent from outside…

Bank Regulators Issue New Proposed Rule on Incentive Compensation

The new rule applies to institutions with assets of $1 billion or more, and will likely go into effect in 2019.

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The National Credit Union Administration is the first of a group of six federal bank regulators[1] to make available a joint proposed rule on incentive compensation arrangements maintained by financial institutions. Initially, these bank regulators issued a jointly proposed rule…

Are Your Retirement Vesting Provisions Motivating the Wrong Behaviors?

Analyzing retirement vesting provisions and ensuring they incentivize the right behaviors.

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As more executives near retirement age, many banks are realizing their equity vesting provisions may be motivating unintended behaviors. Do your bank’s retirement provisions encourage executives to: Provide advance notice of retirement to facilitate planned succession? Assist in their transition?…

Compensation and Governance Committees: Sharing the Hot Seat in 2016

Compensation committees have seen increased scrutiny the past several years, and governance committees will likely see a similar focus in 2016.

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The compensation committee has been on the hot seat for several years. Outrage regarding executive pay and its perceived role in the financial crisis has put the spotlight on the board members who serve on this committee. Say-on-pay, the non-binding…

Keeping Your Compensation Committee On Track During the Busy Winter Season

What you should have in mind as you plan your 2016 calendar.

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The Dodd-Frank Act, regulatory guidelines on compensation risk and shareholder advisory votes on executive compensation have all contributed to an increase in the compensation committee’s responsibilities and time requirements. That pressure is compounded this time of year as committees enter…

Trends Emerging in Compensation Policies for Bank Executives

Meridian examines policies for risk adjusting payouts, use of company stock, and retention of stock awards.

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Governance policies related to executive compensation are on the rise as a result of increased influence of bank regulators, shareholders and the Securities and Exchange Commission (SEC). These policies are intended to reduce compensation-related risk, encourage a long-term perspective and…

Executive Compensation in the Banking Industry

Emerging Trends and Best Practices for 2014-2015

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This is Meridian’s second annual white paper on trends impacting the banking industry (see “New Realities of Executive Compensation in the Banking Industry” for the 2013-2014 white paper). Our research for this paper represents data from Meridian’s review of 2015…

Assessing Your Say-on-Pay Vote

What directors should understand about say-on-pay voting and how to improve results in the future.

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As banks prepare for their annual shareholder meetings, most will have a say-on-pay vote where shareholders indicate whether they sup­port the executive compensation program. This process has pressured companies to improve their compensation disclosures and clearly explain their pay practices…

What’s New for Change-in-Control Agreements

In the banking industry, where mergers and acquisitions are common occurrences, change-in-control (CIC) arrangements can be a critical part of executive compensation programs

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In the banking industry, where mergers and acquisitions are common occurrences, change-in-control (CIC) arrangements can be a critical part of executive compensation programs. However, these arrangements are currently under scrutiny from shareholders, institutional investors, the media and most notably, proxy…

When Constituency Compensation Expectations Collide

NYSE Board Governance Series: Discussion Of Relative Performance, Peer/industry Indices, and Regulatory Issues for Financial Institutions

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Members of the banking industry–and other regulated industries–have different expectations than members of other industries when it comes to executive compensation consulting. Watch Meridian Compensation Partners’ Susan O’Donnell sit down with TK Kerstetter of the NYSE Governance Series to discuss…

Responding to Pressure

How Regulators are Changing Bank Incentive Pay

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The Federal Reserve’s influence on incentive practices at the largest banks is cascading to regional banks. Although the final Dodd-Frank Act regulations have not been released, many banks are adjusting their incentive programs to respond to regulatory pressure. A Meridian…

Balancing Act

Back-and-Forth Over Pay Leads to Small Gains, Changing Incentives

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Bank chief executives had a good but not a great year in 2013, based on an analysis of the pay packages at 35 U.S. banks with assets of $20 billion to $400 billion. Total compensation — including base salaries, incentives…

CEO Salaries Rise Modestly

Influence of Bank Regulators Continues on Pay Design with US Bank Executives Seeing Moderate Raises

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Meridian Compensation Partners, LLC, a leading executive compensation and corporate governance consulting firm, announced the results of their analysis of 2014 bank proxies. Senior executive total compensation (cash and equity) increased only 3.2% in 2013 at 35 mid to large…