SEC Rules on Wall Street Pay—Major Intrusion or Minor Annoyance?
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When the U.S. Securities and Exchange Commission (SEC) took aim at incentive pay packages at financial institutions in a recent controversial proposal, it was the culmination of a three-year push to rein in executive pay at large banks, brokerages, and hedge funds. The move was not unexpected fol- lowing an era of lucrative incentives that were deemed to have fueled excessive risk taking and contributed to a global financial collapse. The crisis prompted a government rescue and, in turn, an angry reaction from Congress. The effects of the crisis will be long lasting, as reflected in our recent CFA Institute Financial Market Integrity Outlook Survey.