Debevoise & Plimpton Discusses NY Guidance on Banks’ Incentive Pay

The New York State Department of Financial Services (the “Department”) issued a guidance memorandum on October 11[1] requiring regulated New York-chartered banking institutions to align their incentive compensation practices with the general principles laid out in the Interagency Guidance on Sound Incentive Compensation Policies issued in 2010 (the “2010 Interagency Guidance”).[2] Specifically, the Department’s guidance requires that incentive compensation arrangements, at a minimum, (1) appropriately balance risk and rewards, (2) be compatible with effective controls and risk management, and (3) be supported by effective corporate governance. The Department published this guidance on the heels of the record $100 … Read more