Federal Deposit Insurance Corporation Chairman Sheila Bair Calls Banker Salaries "Eye-Popping"
Yet another powerful voice has joined the chorus to reign in over-the-top banker bonuses and salaries.
FDIC Chairman Sheila Bair said Wednesday that firms should "exercise better restraint and common sense" when deciding employee pay, a statement that aligns her with the House Democrats and N.Y. Attorney General's efforts to involve government in shaping pay packages, according to Bloomberg News.
“I’m not sure I buy this, that all these eye-popping salaries are necessary to keep folks for competitive reasons,” Bair told Bloomberg. “We do need to revamp the system to make sure that the incentives are long-term.”
Bair told Bloomberg that bank regulators should set 'principles-based' pay standards for compensation without setting specific limits.
Bair's support comes a week after Andrew Cuomo reported that nine banks receiving government aid paid $32.6 billion in bonuses last year, with 4,793 employees receiving more than $1 million. Earlier this year AIG paid $165 million in retention bonuses while receiving more than $182 billion in government aid.
In Washington, lawmakers are already at work. Just last week, the U.S. House of Representatives approved legislation aimed at reducing compensation that leads to risky employee behavior, and to allow share owners to hold an annual non-binding vote on pay packages.