OCC BULLETIN 2016-23
Subject: Incentive-Based Compensation Arrangements
Date: June 23, 2016
To: Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties
Description: Joint Notice of Proposed Rulemaking
The Office of the Comptroller of the Currency (OCC), jointly with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Securities and Exchange Commission, and the Federal Housing Finance Agency (collectively, the agencies), published a notice of proposed rulemaking in the Federal Register on June 10, 2016, to implement the incentive-based compensation provisions of section 956 of the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act. The proposal would establish new requirements for incentive-based compensation at certain covered institutions regulated by the agencies. OCC-supervised institutions that would be subject to the proposed rule include national banks, federal savings associations, and federal branches and agencies, as well as these institutions’ subsidiaries (other than brokers, dealers, insurance providers, investment companies, and investment advisers), that offer incentive-based compensation and have average total consolidated assets of at least $1 billion.
The proposed rule would prohibit incentive-based compensation arrangements that encourage inappropriate risks by a covered institution (1) by providing an executive officer, employee, director, or principal shareholder of the covered institution with excessive compensation, fees, or benefits; or (2) that could lead to material financial loss to the covered financial institution.
Comments on the proposed rule are due July 22, 2016.
Please contact Patrick Tierney, Assistant Director, Alison MacDonald, Senior Attorney, or Melissa Lisenbee, Attorney, Legislative and Regulatory Activities Division, at (202) 649-5490; or Judi McCormick, Analyst, Operational Risk Policy, at (202) 649-6415.
Amy S. Friend