A new SEC rule would require certain financial institutions to disclose the structure of their incentive-based compensation practices, and prohibit those institutions from maintaining compensation arrangements that encourage inappropriate risks.  The rule would impact broker-dealers, investment advisors and other SEC-registered financial institutions with $1 billion or more in assets.  The proposed rules would:

• Require reports re: incentive-based compensation to be filed annually with SEC.

• Prohibit incentive-based compensation arrangements that encourage inappropriate risk-taking by providing excessive compensation or that could lead to material financial loss to the firm.

• Provide additional requirements for financial institutions with $50bn + in assets, including deferral of incentive-based compensation of executive officers and approval of compensation for people whose job functions give them the ability to expose the firm to a substantial amount of risk.

• Require them to develop pols and procedures that ensure and monitor compliance with requirements related to incentive-based compensation. 

For further details, go to:   [SEC PR 11-57, 'Incentive-Based Compensation']