New York State Attorney General Andrew Cuomo is in discussions with Rep. Barney Frank and other lawmakers on a plan to tie Wall Street pay to the long-term performance of the firms, reports the Wall Street Journal.
Frank (D-MA), chairman of the House Financial Services Committee, and other prominent Democrats appear to back the plan, although no new legislation has been introduced. “We plan to put laws into effect, no question,” said Frank.
“We have to address this ‘heads I win, tails I break even’ issue,” Frank said.
Cuomo is currently investigating the $3.62 billion in bonuses paid to Merrill Lynch executives just before it was acquired by Bank of America at the end of last year. He is trying to determine if the firm violated securities laws by failing to disclose information in the weeks leading up to the payouts.
A person close to Cuomo told WSJ that change is needed but the intent isn’t to micromanage or interfere with the private sector.
“We certainly need to understand the industry’s perspective on the potential unintended consequences of compensation reform before we finalize these long overdue changes,” the person said.