The SEC has ruled that Bank of America and JPMorgan Chase may omit the American Federation of State, County, and Municipal Employees’ new “bonus banking plus” proposal, which seeks changes in how the banks compensate their 100 most highly paid employees.
“We are disappointed by the SEC’s ruling,” said John Keenan, a strategic analyst with AFSCME. “On one hand, Pay Czar Ken Feinberg has the authority to regulate pay of the top 100 paid employees at the big seven TARP firms, and the Federal Reserve is reviewing the link between compensation and risk at the largest 25 banks, and yet the SEC is allowing Bank of America and JPMorgan to omit our bonus banking proposals on ordinary business grounds. As the financial crisis plainly shows, compensation practices for traders, brokers, and investment bankers, and not just the senior executives, can [incentivize] unnecessary and excessive risk.”
AFSCME has submitted similar proposals at Wells Fargo and Goldman Sachs, which also have filed no-action requests. They both argue that the resolution relates to “ordinary business” and is “misleading.”