Incentive-Based Compensation

Incentive compensation lies at the heart of how financial institutions recruit and retain talent. Being able to recruit and retain highly capable employees, in revenue-generating functions, enterprise control functions, technology positions and many other roles that do not directly involve taking risk, is critical to our members’ ability to responsibly operate and risk-manage their businesses.

SIFMA agrees it is important compensation arrangements in the financial sector to ensure compensation practices are consistent with the overall safety and soundness of the financial system. The financial services industry has proactively implemented tremendous changes in compensation practices to discourage excessive risk-taking and better align incentives between individuals, firms, and their shareholders.

SIFMA supports principles-based compensation rules that allow each financial institution to prudently tailor its application to particular business models and circumstances.

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