Citigroup Inc., Wells Fargo & Co. and Capital One Financial Corp. have agreed to change their pay policies to make it easier to pull back compensation from executives involved in misconduct.
Employees responsible for serious financial or reputational harm to a company as well as their supervisors are now subject to pay clawbacks under agreements the three banks reached with New YorkComptroller John C. Liu, the city official said Thursday in a statement. The policies are similar to a deal Liu reached last year with Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co., according to the statement.
“Executives need to be held financially accountable for misconduct that harms the company, and that includes improper behavior and reckless risk-taking by those they manage,” Liu said in the statement. “This is avital step toward reining in out-of-control executive pay based on short-term gains.”
Previously, the three banks only permitted clawbacks from executives who committed intentional or gross misconduct, according to the statement.
Liu previously filed shareholder proposals with each of the three banks and later withdrew them after the companies adopted changes to their compensation policies. The lenders have each paid fines in recentyears to settle allegations of deceptive or improper business practices, according to Thursday’s statement.
Capital One, based in McLean, Va., will disclose the total amount clawed back as long as the circumstances have already been publicly disclosed, according to the statement. San Francisco-based Wells Fargo and Citigroup, which is based in New York, agreed to consider disclosing the amount of pay recouped.
Business, Pages 24 on 03/15/2013