The FDIC proposed rules this week that would require big banks to space out their bonus payments to senior execs. Here are four reasons why other companies should adopt similar rules.
By Eleanor Bloxham, contributor
On Monday, the FDIC approved a draft rule that would require large financial institutions to hold a minimum of half of senior executives' bonuses for at least three years. This falls in line with what some financial institutions have already started to implement on their own. Morgan Stanley (MS), for example, recently announced that they are extending their bonus deferral program to more of their employees.
Bonus deferral or lengthening programs pay out bonuses over a period of years, making payment subject to future performance of the individual, their department or team, or the entire company. The programs may pay out bonuses in a number of forms; in my opinion, the payments under these bonus programs should be in cash.
Other companies, not just banks, have incorporated bonus deferral or lengthening programs in the past, and more companies, not just banks, should consider them now.
Here's why. More
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