Executive Compensation at Financial InstitutionsExecutive compensation at U.S. companies has become dramatically dispropor...
a minimum percentage of the target bonus is paid. The bonus payment can increase up to some maximumpayment corresponding t...
prices), but does not track closely with corporate profits. This phenomenon matches recent research findings ofGabaix and ...
payout for executives comes at the expense of shareholders. Stock options are intended to align executives withthe interes...
and Morgan Stanley became bank holding companies. Exacerbating the economic downturn was the industry-wide decision of ban...
On June 10, 2009, the Treasury issued an Interim Final Rule (IFR) in regards to executive compensation andcorporate govern...
Executive compensation practices are undergoing significant reform driven by legislation and regulationchanges directed at...
Mankiw, G. (2006). "Gabaix on CEO Pay."McTague, J. (2008, September 29). "Punishing the Bankers: Why It May Not Pay." Barr...
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Executive Compensation at Financial Institutions

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Executive compensation at U.S. companies has become dramatically disproportionate relative to the average workers at those companies over the past 25 years. Now, the current global financial crisis is putting a harsh spotlight on executive compensation at financial institutions in particular. This report looks at the basic nature of executive compensation packages and the issues or concerns that have been raised about them. That information provides a context for looking specifically at financial institutions: what makes their executive compensation programs different and how the current financial crisis is going to affect those programs.

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Transcript of "Executive Compensation at Financial Institutions"

  1. 1. Executive Compensation at Financial InstitutionsExecutive compensation at U.S. companies has become dramatically disproportionate relative to the averageworkers at those companies over the past 25 years. Now, the current global financial crisis is putting a harshspotlight on executive compensation at financial institutions in particular. This report looks at the basic natureof executive compensation packages and the issues or concerns that have been raised about them. Thatinformation provides a context for looking specifically at financial institutions: what makes their executivecompensation programs different and how the current financial crisis is going to affect those programs.Executive compensation refers to the mechanism that corporations use to pay their senior executives. Publiclytraded companies are required by the Securities and Exchange Commission (SEC) to report and explaincompensation paid to these senior executives. Senior executives usually include the CEO, CFO, and three otherhighest-paid employees identified in a companys financial reports. These executives are the primary operationalagents for shareholders hired by the Board of Directors and employed to lead the firm.Companies attempt to structure their executive compensation packages to recognize the special role played bytheir CEOs and other executives as the public leaders of the companies. Executives act as operational agents forshareholders of a company, so executive compensation is structured to offset a potential agency problem. Inessence, this agency concept refers to the supposition that senior executive officers of companies with numerousstakeholders will act in their own best interests to maximize personal gains before the interests of the manyother stakeholders of the firm, in the absence of proper controls.To address this agency problem with company executives, executive compensation plans rely heavily onbonuses and incentives that are tied to how well those executives lead the company to generate greatershareholder wealth. However, executive compensation has exploded since 1980 both in absolute dollars and inrelationship to compensation of other company employees. Publicity about extreme cases has triggered angerand potential legislation to change how executive compensation works and constrain how much executives arepaid. There is heightened sensitivity now to apparent excessive executive compensation at financial institutions,focusing on ones being bailed out of trouble with taxpayer dollars. As a result, the U.S. federal government isactively changing executive compensation at financial institutions.A compensation package is put together to address multiple objectives: attract talented employees, retainemployees who perform well, and focus employees on contributing to the success of the company. Especially inthe case of executive compensation packages, those packages must recognize the special public leadership roleprovided by executives and must ensure that the company and executive interests are aligned. Executives areagents for the owners of the firm and to avoid any agency problem of conflicted interests their compensationpackages are carefully crafted, trying to induce and reward high performance and success for the firm. Highperformance is usually associated with generating shareholder wealth.Base salary is the fixed portion of executive compensation usually determined by using salary surveys andanalyzing pay at market peer companies. Variations relate to previous experience and demonstrated skills. Forcorporate executives base salary is defined in an employment contract and thus not tied to performance.Because salary is fixed, other components of a compensation package often are expressed as a function of basesalary. For example, a target annual bonus may be set at some percentage of base salary.An annual bonus provides a variable payment to the executive that is only paid when specified performancemeasures reach pre-defined thresholds. The bonus payment is usually cash and the performance measuresreflect important aspects of corporate performance, although sometimes measures relate to individualperformance. No payment is made unless the performance measure reaches a minimum threshold at which point 1
  2. 2. a minimum percentage of the target bonus is paid. The bonus payment can increase up to some maximumpayment corresponding to the performance measure reaching some cap or maximum level.An example bonus plan might be to pay a target bonus of 30% of base salary if the firm achieves earnings pershare of a set amount. The minimum performance threshold might be 85% of the performance target and pay at85% of the target bonus. Similarly, the maximum threshold and payment might be set at 110%. The Board ofDirectors choice of performance measures and target results expresses the corporate goals the executive agentshould be trying to achieve for the companys shareholders.Long-term incentives award an executive with corporate equity in the form of stock options and/or restrictedstock. Stock options vest over multiple years (usually 3 to 5 years), with incremental percentages of the stockbecoming exercisable (tradable) over the years. Stock options are only valuable if the stock price rises overtime. Restricted stock is granted (given to the executive without paying for them) with constraints such asrequiring them to be forfeited if the executive leaves the company within a certain time period (at least 3 years).In both cases, the executive is encouraged to stay with the company and to ensure that the company sustainsgood performance. Long-term incentives in the compensation package directly tie the interests of the executiveto the interests of shareholders by making the executive a significant shareholder as well.Perquisites (often referred to as perks) are benefits provided to the executive. These perks include standardemployee benefits plus extra fringe benefits such as extra insurance, memberships in special clubs, and specialtransportation privileges. This is usually a small portion of the compensation package, 2% to 3%. Perks areintended to expedite the executives work efforts such as using club memberships to entertain customers or flyon a company jet to reduce total time away from the office.Severance agreements are a common component of an executive compensation package, especially when anemployment agreement is in place. A severance agreement spells out payments to be made to the executiveupon leaving the company involuntarily without cause such as when a company is sold or merged and changescontrol of the firm. This type of agreement is often referred to as a "golden parachute" and typically consists ofpayments of two to three times annual base salary and bonuses plus certain benefits. A severance agreementintends to encourage executives to be objective during takeover or merger situations.The SEC has had regulations in place for many years that require executive compensation to be presented in afirms annual report and proxy statement, plus Form 10-K filings. These rules try to limit asymmetricinformation problems by having all publicly traded companies uniformly and consistently report thecompensation of senior executive officers. The rules have expanded over the years in an attempt to makecompensation more transparent and clear to investors and shareholders. Historically, the Board of Directors setsexecutive compensation often with the help of paid compensation consultants and initial recommendations fromcorporate management. The SEC requires that the outside board members (not firm employees) vote to approveexecutive compensation.Executive compensation is a concern of shareholders specifically and of the public in general. Shareholders relyon the firms executives as the shareholders key operational agents running the company, plus shareholders paythe firms executives out of funds that otherwise would become profits. The general public has been especiallyconcerned about executive compensation since 1976 when modern financial analysis began looking atmanagerial power as an agency problem.Apparent excesses in executive compensation and dramatic growth since 1980 combine with publicized abusesto draw ever more attention to executive compensation amounts and practices. In 1980 the ratio of CEO totalcompensation to average pay for hourly workers was 42 to 1. By 2008 that ratio dramatically rose to 344 to 1.The bull market of the 1990s coupled with heavy use of stock options for long-term incentives to drive up thisratio. Changes in executive compensation have tracked the S&P 500 index (representing changes in stock 2
  3. 3. prices), but does not track closely with corporate profits. This phenomenon matches recent research findings ofGabaix and Landier, whose model of CEO pay shows that the dramatic growth in CEO pay from 1980 to 2003is fully attributable to the growth in market capitalization of large companies for that period.The dramatic difference between CEO compensation and pay for normal workers is very hard for those normalworkers to understand or accept. A survey of 2701 companies in 2007 found that the median total compensationfor CEOs was $2.5 million, but CEO total compensation for the 30 highest paid CEOs in 2007 was between $40million and $322 million per year. And, in 2008, the average compensation of CEOs for the 500 firms in theStandard and Poors 500 (S&P 500) was $10.5 million per year. These huge numbers generate public anger,especially among normal workers facing job losses and financial hardships. When companies do not performwell for shareholders, then an agency problem is exposed suggesting that executives are not pursuing theinterests of the firms owners as strongly as they pursue their own interests.There are flaws in implementation for each component of executive compensation, at least in select cases. Manycompanies have performed reasonably well over the years and pay their executives between 1% and 2% ofannual returns to shareholders - an acceptable amount. However, excessive or extreme situations are easy toestablish and generate negative publicity for underperforming companies during the current financial crisis.Setting base salary can be problematic given that the SEC requires public disclosure for executive pay.Competitive executives use the public information to negotiate higher salaries. This is further exacerbated bypublished salary surveys that are used by companies and compensation consultants. This situation implies thatthe SECs efforts to limit asymmetric information have led to salary escalation.Bonus payments have shown no significant correlation to executive performance. Relatively short-term annualbonuses tied to accounting measures can be easily manipulated for short-term effect. Stock options as a long-term incentive showed their flaws with the windfalls for executives that resulted in the 1990s when stock pricesrose dramatically due to industry and market trends, unrelated to executive performance. This windfall effect isnot filtered out to ensure a true reward for good performance by the executive. Perks have little to do withexecutive performance and instead serve to separate and potentially isolate top managers from the rest of theemployees. A December 2008 survey by Watson Wyatt found that 21% of firms polled are reducing oreliminating perks.Severance agreements are useful to keep executives open to appropriate merger and acquisition opportunities,but extreme versions are golden parachutes drawing negative attention to this component of compensation. In2007 CEO severance packages at the top 200 publicly traded companies averaged $38.4 million. One extremecase in 2007 occurred when Home Depots CEO, Robert Nardelli, was fired and left the company with $210million. The situation with Nardelli at Home Depot also highlights a flaw in severance packages that aretriggered even with the executive is asked to leave even when there is no change of control due to acquisition ormerger.Abuses in executive compensation increase both shareholder and general public concern with whatcompensation packages pay out, how they are established, and how they are implemented. The U.S. House ofRepresentatives undertook a study in December 2007 to evaluate the conflict of interest involved whencompensation consultants advise firms and their Boards of Directors. The study found that out of the 250 largestpublicly traded companies in the U.S., 113 firms received compensation advice from consultants that generatedsignificant revenue from these firms for other consulting services. The conflict of interest was pervasive and theresulting level of CEO pay at the companies using conflicted consultants was 67% higher than the mediancompensation at the other firms.Another abuse of the compensation system for executives is highlighted by the 2006 stock options scandalwhere over 100 corporations were investigated by the SEC for back-dating stock options for their executives.Back-dating involves changing the date used to set a lower exercise price of stock included in the option. The 3
  4. 4. payout for executives comes at the expense of shareholders. Stock options are intended to align executives withthe interests of shareholders, but in this case the executives were acting in their own interests.Executive compensation at financial institutions is roughly the same as in other industries. The 2007 study bythe Wall Street Journal and the Hay Group compared industries for how compensation is split up within apackage. The average split over all business categories was 18% salary, 24% bonus, and 58% long-termincentives. For financial institutions the split was only slightly different: 14% salary, 29% bonus, and 57% long-term incentives. There were 55 financial firms included in the study out of 417 companies overall. The maindifference is in the heavier use of variable pay through bonuses. Earnings are the significantly predominantperformance measure used to determine bonuses in financial firms. This is the predominant performancemeasure used in other business categories.Although executive compensation is implemented similarly at financial institutions as it is at other businesses,the special nature of banks and other financial institutions should be reflected in a variation in theircompensation plans. In recent testimony before the U.S. House of Representatives Committee on FinancialServices, Lucian Bebchuk identified an important distinction in executive compensation at financial institutions.His point was that the financing structure of these firms and their compensation packages lead to excessive risk-taking. Specifically, Bebchuk suggests that incentives are tied to "a highly leveraged bet on banks assets."Bebchuk argues that tying executive compensation heavily to bonuses and long-term incentives that relatepredominantly to accounting measures (such as earnings) reflects the interests of common shareholders andignores the interests of other important stakeholders of financial institutions: preferred shareholders,bondholders, and depositors. A broader set of metrics to drive appropriate incentives for bank executives areneeded. Using bonuses and incentives to prevent any agency problems with executives at financial institutionsis flawed by concentrating only on common shareholders and stock price.Executives at financial institutions are not the highest paid executives relative to other U.S. businesses andfinancial firms are not the only ones with compensation packages that anger employees, shareholders, and thegeneral public. However, the current financial crisis has put a spotlight on these executives, especially the onesreceiving funds from the U.S. government. Examples from 2007 of extreme compensation amounts within thefinancial firms included Goldman Sachs CEO Lloyd Blanfein getting $54 million per year and J.P. MorganChase CEO James Dimon getting $30 million per year. In comparison to these packages, CountrywideFinancial CEO Angelo Mozilo received $102 million in 2007 before that company was acquired by Bank ofAmerica and Mozilo was charged by the SEC with insider trading and securities fraud.One result of the current financial crisis is lower total compensation for CEOs; CEO compensation dropped by15% in 2007 and 11% in 2008 (IOMA, 2009). Much of the drop in pay is due to lower performance (lowerprofits) by the CEOs firms which affects bonuses and stock option (or restricted stock) valuations. In 2008financial institutions CEOs experienced a 43% drop in pay - significantly more than the average overall.According to the National Bureau of Economic Research (NBER), the current U.S. recession began inDecember 2007. One of the drivers of this situation was losses and write-downs that banks and other financialinstitutions incurred by holding asset-backed securities (ABS) - in particular, non-prime mortgage-related ABS.The prices of ABS of this nature dropped significantly following a rise in mortgage defaults and foreclosures,which was a result of falling house prices and a weakening economy.There has been a high level of complexity in the events surrounding this recession, but the majority of the focushas been on the financial sector. Due to the significant losses on ABS such as those that were created frompools of subprime - now seen as "toxic" - loans, bank failures were on the rise. The investment bankingbusiness essentially ceased to exist in the U.S., at least in its current form, as companies like Bear Stearns andLehman Brothers filed for bankruptcy, Merrill Lynch was acquired by Bank of America, and Goldman Sachs 4
  5. 5. and Morgan Stanley became bank holding companies. Exacerbating the economic downturn was the industry-wide decision of bank lenders to limit the credit supply. The plunge in-house prices was coupled with a 52percent drop in the S&P 500 stock price index from October 9, 2007 to November 20, 2008, and an oil priceshock.Such shocks also slowed the demand for credit as a result of weaker future growth of income and profits.Unemployment has also reached dizzying heights for the U.S. Since December 2007, 2.6 million workers havebeen left jobless. Typically, the U.S. has an unemployment rate that is approximately half of that of itsEuropean counterparts. Now, the unemployment rate in the U.S. is nearly touching on low double digits.In the current global business environment, markets and economies around the world have become much moreinterconnected. From an economic perspective, one could accurately assess this situation as strong positivecorrelations among such nations. This tying together of the worlds economies is linked to global markets andinternational trade.The U.S. recession has also had negative ramifications on its trading partners: according to the Economic CycleResearch Institute (ECRI) six of the worlds seven major developed countries that make up the G7 are nowexperiencing a recession. Global gross domestic product (GDP), according to the International Monetary Fund,is expected to decline by at least one-half basis points - the first annual decline in world GPD in 60 years.The simultaneous slowing in economic growth in most of the worlds largest economies also had a negativeimpact on the U.S. economy as exports were a key source of U.S. economic growth in 2004-07. The "creditcrunch," as media outfits described the current situation, has global implications because international investorsare involved. There was a distribution of ABS composed of risky mortgages packaged and sold to banks,investors, and pension funds around the globe. These repackaged debt securities became much moresophisticated, as it was unclear how to define who owned the property, and the crisis really developed from themis-pricing of the risk of these products.The government response to this economic crisis was to provide about $1.1 trillion in new liquidity, as well ashundreds of billions of dollars in new capital for flailing institutions. The idea in Washington, D.C. was thatdeclining house prices triggered a financial crisis that could be alleviated only through government action (Hall& Woodward, 2009). Both the Federal Reserve Bank (Fed) and the federal government supported a stimulus tohelp restore full employment and offset the recession by lifting house prices and the condition of institutionsthat are holding mortgages.The U.S. Treasury Department (Treasury), under the guidance of former Treasury Secretary Henry Paulson,created the Troubled Asset Relief Program (TARP) to recapitalize a range of financial institutions through aseries of quasi-permanent loans. It has invested in banks, AIG, and even one non-financial company, GeneralMotors. TARP has been designed to add capital to the firms which receive a TARP injection because thesefirms do not have to pay it back until convenient. This program has been thought of as an important means ofproviding liquidity in the financial markets, as the added capital makes banks more willing to lend by reducingtheir fears of becoming insolvent due to an inability to meet their obligations should asset prices decline. Up tonow, banks have hoarded liquidity to cover any losses they might experience on their own books.Furthermore, the Obama administration has collaborated with Congress to create a fiscal stimulus program - theAmerican Recovery and Reinvestment Act of 2009 (ARRA). The stimulus is well-diversified across the U.S.and has been distributed in the form of spending increases and tax cuts. The purpose of the tax cuts is primarilyto reduce the cost of labor or improve incentives to work. Removing sales taxes and gradually bringing themback in effect has been an idea proposed in this legislation and would stimulate immediate consumptionspending. 5
  6. 6. On June 10, 2009, the Treasury issued an Interim Final Rule (IFR) in regards to executive compensation andcorporate governance provisions of the Emergency Stabilization Act of 2008 (EESA), later amended by theARRA. The IFR applies to firms that received or will receive financial assistance under the TARP andconsolidates or overrides previous Treasury rulings on executive compensation. However, there are exemptionsfrom certain provisions for TARP recipients that do not have outstanding obligations to the government.Firms with outstanding TARP obligations are prohibited from paying or accruing any bonus, retention award, orincentive compensation to certain employees. Depending on the size of the TARP financial assistance, this mayapply only to the single most highly paid employee. Larger firms have restrictions that apply to a greaternumber of employees. For instance, the highest paid employee is the only individual bound by this provision infirms receiving less than $25 million in financial assistance. The rule applies to the five most highlycompensated employees of a TARP recipient receiving between $25 million to less than $250 million infinancial assistance. Restrictions apply to a greater number of employees for TARP recipients receiving higheramounts of assistance.Golden parachutes for senior executive officers of firms receiving TARP assistance are now prohibited; thesesenior executives typically include the principal executive officer, principal financial officer, and the three mosthighly compensated executives. Furthermore, a provision in the IFR allows firms to seek a recovery or"clawback" of any bonus, retention award, or incentive compensation paid or accrued to a senior executive orone of the next 20 highly compensated employees when payments or accruals were based on materiallyinaccurate financial statements or any other materially inaccurate performance metric criteria.A compensation committee composed of independent members of the Board of Directors of TARP recipientsmust be established by September 14, 2009, if not already in existence. The IFR states three main purposes forthe creation of this committee. The compensation committee must discuss, evaluate, and review executivecompensation plans to ensure that there are no incentives to encourage taking unnecessary and excessive risksthat could threaten the value of the TARP recipient. Secondly, a similar discussion, evaluation and review withsenior executives will be made to prevent compensation plans from encouraging a focus on short-term resultsrather than long-term creation. Lastly, this process will be implemented in order to discourage the manipulationof reported earnings to enhance compensation. All three provisions protect the stakeholders of a firm, whetherpublicly traded or privately owned. In addition, Boards of Directors are required to offer "say on pay", anonbinding shareholder vote on executive compensation.Another important development in the IFR relating to executive compensation is a requirement for TARPrecipients to develop an excessive or luxury expenditure policy. Such expenditures include: entertainment orevents; office or facility renovations; aviation or other transportation services; or any other similar perks orevents that are not reasonable for staff development, performance incentives, or other similar expendituresincurred in the normal course of business. This provision is implemented to prevent situations such as theexecutive officers of the Big Three carmakers who chartered private jets to Washington, D.C. to seek financialassistance from the government. Such spending excesses will be eradicated with the implementation of this IFRguideline.The issue regarding executive compensation in industry has been an ongoing concern at least since the 1980s, asthe pay differential between senior executive officers and those of "rank-and-file" workers continues to spreadsignificantly, much to the dismay of the public at large. This paper looks specifically at this topic as it relates tothe financial industry, paying special attention to the recent events leading to the current recession in the U.S.While many financial firms - and certainly all of the "bulge bracket" firms - have acted in aggregate in a similarmanner to other businesses, more scrutiny is placed on this industry due to its direct involvement in the creditcrunch and subsequent recession both domestically and in many partnering nations abroad. 6
  7. 7. Executive compensation practices are undergoing significant reform driven by legislation and regulationchanges directed at financial institutions. One of the main objectives of reform in executive compensation in thefinancial industry is to significantly improve on how compensation packages address the agency problem. Tocurtail this dilemma, federal legislation was enacted in June 2009 to closely regulate executive compensation infinancial institutions, and others, who received funds from the federal government through the TARP. Specificrules differ based on the size of TARP assistance received. There is ongoing discussion of how best to adjustbonus and incentive compensation components to be more effective at aligning executive interests with allstakeholder interests, given the special nature of financial institutions. Every aspect of executive compensationis being addressed, including the elimination of golden parachutes (excessive severance packages) andexcessive expenditures on perks.New regulations and legislation, as yet unproven, have come into place predominantly to more effectivelymitigate the agency problem in both the financial industry and other industries in general. Furthermore, thesechanges have developed as a political response to the outcry from the public. It remains to be seen how thefinancial industry will react to the changes, but the issue of executive compensation is likely to be highlighted inpopular press as well as academic studies for the foreseeable future.REFERENCES:Anderson, S. & Pizzigati, S. (2009). "The CEO Pay Debate: Myths v Facts."Aubuchon, C., & Wheelock, D. (2009). "The Global Recession." Federal Reserve Bank of St. Louis: EconomicSynopses, 22, 1-2.Bebchuk, L. (2009). "Compensation Structure and Systemic Risk.".Bebchuk, L. & Fried, J. (2003). "Executive Compensation as an Agency Problem." Journal of EconomicPerspectives, 17(3), 71-92.Gabaix, X. & Landier, A. (2008). "Why has CEO pay increased so much?" Quarterly Journal of Economics,123(1), 49-100.Griffith, J., Fogelberg, L., & Weeks, H. (2002, Summer). "CEO Ownership, Corporate Control, and BankPerformance." Journal of Economics and Finance, 26(2), 171-183.Grossman, R. (2009, April). "Executive pay: Perception and Reality." HR Magazine, 54(4), 26-32.Hall, R., & Woodward, S. (2009, February 2). "The Financial Crisis and the Recession: What is Happening andWhat the Fed Should Do."Hoseman, L. (2009, May). "Recent Economic Recovery Legislation Contains Significant New ExecutiveCompensation Requirements." Employee Benefit Plan Review, 63(11), 32-34.IOMA (2009). "Executives share the pain: Bonuses drop & pay falls 8 to 11 percent" (2009, June). Report onSalary Surveys, 9(6), 1-15.Jensen, M., & Murphy, K. (1990). "Performance Pay and Top-Management Incentives." Journal of PoliticalEconomy, 98(2), 225-264.Kliesen, K. (2009). "Putting the Financial Crisis and Lending Activity in a Broader Context." Federal ReserveBank of St. Louis: Economic Synopses, 11, 1-2. 7
  8. 8. Mankiw, G. (2006). "Gabaix on CEO Pay."McTague, J. (2008, September 29). "Punishing the Bankers: Why It May Not Pay." Barrons, 88(39), 51.Mizen, P. (2008, September/October). "The Credit Crunch of 2007-2008: A Discussion of the Background,Market Reaction, and Policy Responses." Federal Reserve Bank of St. Louis Review, 531-568.Murphy, K. (1999). "Executive Compensation," in Handbook of Labor Economics. Orley Ashenfelter andDavid Card, eds. Amsterdam: North Holland, 2485-2563.Popken, B. (2007). "CEO Pay up 298%, Average workers? 4.3% (1995-2005)."Sisk, M. (2009, April). "The Compensation Conundrum." USBanker, 119(4), 8-9.Thompson, R., Holley, S., Wade, J., & Carr, M. (2009, June 19). "New Developments in Financial Institutionsand Executive Compensation: The Treasury Releases Interim Final Rule on TARP Standards for Compensationand Corporate Governance." Corporate and Securities Law Alert: News For The Clients And Friends Of Bass,Berry & Sims PLC., 1-6.Toppin, C. (2007, Fall). "Reporting Executive Compensation: Comparison of Proxy Statement and Tax Rules."The Practical Tax Lawyer, 53-59.U.S. House of Representatives (2007). "Executive pay: Conflicts of interest among compensation consultants."U.S. Treasury (2009). "Financial Regulatory Reform: A New Foundation."U.S. Treasury (2009). "Executive Compensation FAQs."Webb Cooper, E. (2009). "Monitoring and Governance of Private Banks." Quarterly Review of Economics andFinance, 49(2), 253-264. 8

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