This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Citi, Wells Fargo, Capital One Agree to Expand Clawback Policy: NYC Comptroller

NEW YORK ( TheStreet) -- Citigroup (C - Get Report), Wells Fargo (WFC - Get Report) and Capital One Financial (COF - Get Report) have agreed to expand their policies on "clawbacks" in the event of misconduct that causes financial or reputational harm, the New York City Comptroller John C. Liu said Thursday.

All three banks adopted new policies that allow their boards of directors to recover or "claw back" bonuses from executives who are responsible for misconduct that causes serious financial or reputational harm to the company. Previously, the directors could claw back pay only in the event of fraud or gross negligence or in the event of a financial restatement.

The banks also agreed to improve their disclosure of clawbacks. Capital One said it will disclose the total amount recovered in connection with any publicly disclosed event. Wells Fargo and Citigroup said they will consider disclosure on a case to case basis.

The agreements follow ones reached with JPMorgan Chase (JPM - Get Report), Goldman Sachs (GS) and Morgan Stanley (MS) in 2012, requiring the banks to clarify that their clawback policies covered not just employees but supervisors as well.

The Comptroller serves as the investment advisor to, custodian, and trustee of the New York City Pension Funds, which held a combined 20.8 million shares worth $867.59 million as of March 12.

The NYC Pension Funds and Comptroller Liu had filed shareowner proposals at the three banks, but withdrew them after the banks adopted significant changes to their current clawback policies.

Since the financial crisis and the passing of the Dodd Frank Act, most banks have said that they have implemented compensation policies that allow clawback of previous pay in the event of misconduct. Still, there have been few publicly reported cases of clawbacks.

The most high-profile example in recent times is JPMorgan's clawback of two years' worth of annual compensation from traders who were directly responsible for $6 billion in trading losses at the firm's chief investment office. The losses led the bank to amend its financial statements and was a black eye to its spotless reputation.

Swiss bank UBS (UBS) was among the first to claw back bonuses after a $2 billion loss from a rogue trade.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
C $51.38 0.00%
COF $74.45 0.00%
JPM $61.93 0.00%
UBS $19.79 0.00%
WFC $52.14 0.00%


Chart of I:DJI
DOW 17,084.49 +33.74 0.20%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,830.47 +19.6820 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs