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. Issuance of the guidance was intended to bring
incentive compensation practices under control.
US Code:
12
USC 161 Name of Law: The National Bank Act
PL: Pub.L. 111 - 203 124 Name of Law:
Dodd-Frank Wall Street Reform and Consumer Protection Act
The increase in burden is due
to the integration of the OTS with the OCC. The additional
respondents are entities formerly regulated by the OTS. 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. It was urgent that incentive
compensation practices be brought under control through supervisory
action. This Guidance fulfills the commitment made by President
Obama and the Department of the Treasury at the G-20 meeting in
September 2009 to implement the Financial Stability Board's
Compensation Principles.
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.