The Fed has some “large U.S. financial services firms” by the balls. Morgan Stanley is not among them.
Seven large U.S. financial-services firms, including PNC Financial Services Group, Capital One Financial Corp., and Discover Financial Services Inc., said they are scaling back the maximum bonuses awarded to executives who beat their performance targets, according to regulatory filings.
Late last year, the Federal Reserve began contacting banks about their compensation plans, said a person familiar with the phone calls. In regulatory filings, many of the firms cited the Fed as a reason for changes….
BB&T Corp., KeyCorp, U.S. Bancorp and SunTrust Banks Inc. are the other U.S. firms that cut their maximum performance-based bonuses recently, according to a study set to be released as early as Tuesday by pay-consulting firm Compensation Advisory Partners. The study examined practices at 23 of the largest financial-services firms.
Seven firms kept their performance programs the same as last year, according to the study. Eight others didn’t have a plan last year. One securities firm, Morgan Stanley, increased the maximum performance payout after reducing it a few years ago, according to the study’s authors. The report points out that Morgan’s payout couldn’t increase if the company’s shareholders experienced a loss.