Guidance on Sound Incentive Compensation Policies

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.

Recordkeeping Requirements for Large Banks

Federal Enterprise Architecture: Economic Development - Financial Sector Oversight