Obama Looks To Change Pay Practices At Banks

According to reports from the Wall Street Journal, the Obama administration is looking at ways to curb compensation practices at financial companies, including ones that have not received federal bailout money.

Ideas being discusssed include possible rules which would limit pay to employees that could threaten the "safety and soundness" of the bank, such as paying loan officers for the volume of loans versus the quality. The administration may issue a "best practices" outline to banks on ways to structure pay.

An unidentified administration official said, "This is not going to be about capping compensation or micro-management. It will be about understanding what is the best way to align compensation with sound risk management and long-term value creation."

Despite the banking industry's weakened state, it will likely try to push back against pay curbs.

Link to WSJ Article

Related Stocks: Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), JP Morgan (NYSE: JPM), Wells Fargo (NYSE: WFC), Bank of America (NYSE: BAC), Citigroup (NYSE: C).

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