Senators Introduce Bill to Claw Bank Compensation from Bank Executives
Senators Elizabeth Warren (D-MA), Josh Hawley (R-MO), Mike Braun (R-IN), and Catherine Cortez Masto (D-NV) introduced a bill "to clarify that the Federal Deposit Insurance Corporation and appropriate Federal regulators have the authority to claw back certain compensation paid to executives."
The bipartisan group of legislators introduced S.1045 ("Failed Bank Executives Clawback Act") following the recent failures of Silicon Valley Bank and Signature Bank. The proposed legislation would provide that in the case of insolvency or resolution of an FDIC-insured banking entity, the FDIC would claw back any or all of the executives’ compensation from the five years preceding the bank’s failing. The proposed legislation states that the creditors and shareholders of a bank holding company affiliated with an insured depository institution resolved by the FDIC must bear the losses of the institution.
In a statement, Senator Warren said that the bill "answers [the] imperative" to "hold failed bank CEOs accountable and give the financial cops on the beat additional authority to clawback lavish pay and bonuses when executives explode their bank . . . "
Senator Hawley stated that "[b]ank executives who make risky investments with customers' money shouldn't be permitted to profit in the good times, and then avoid financial consequences when things go south . . . [t]his legislation puts the executives' own profits on the line, and that's exactly as it should be."
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