But other banks have not really disclosed instances of clawbacks. One reason for fewer clawbacks has been that banks continue to face legal and practical challenges to implementing the policy unless it is a case of massive fraud or gross negligence where it is easier to identify blame.
The new clawback policies pushed by Liu aim at creating a tougher standard for compensation practices.
"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," Comptroller Liu said in a statement. "This is a vital step toward reining in out-of-control executive pay based on short-term gains.
-- Written by Shanthi Bharatwaj in New York.
>To contact the writer of this article, click here: Shanthi Bharatwaj.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts