May 27, 2011
Elizabeth Murphy
100 F Street, NE
Washington, DC 20549
Dear Murphy,
America paid a terrible economic price because of irresponsible risk-taking by Wall Street executives, and we not want to ever have to have this occur again. Those executives took those risks, because they knew that they could walk away with billions of dollars in bonuses and stock options and never pay for the long-term consequences of their actions. We have added stronger regulations, but they only work if you actively enforce them. It is against the country's best interests to have that Wall Street pay packages that encourage short-term risk taking., and it is your responsibility to protect us.
Your rules should require at least a five year deferral period for executive bonuses at big banks, and these executives should have their benefits included as part of their taxable income. This information should be made public for all senior executives and board members. We should ban executive hedging in the financial services area so that there is not even the impression of inappropriate behavior. We should require specific details from banks on precisely how they ensure that executives will share in the long-run risks created by their decisions.
It should apply to the full range of important financial institutions, and draw in all the key executives at those companies. Whatever else the company does, if it has a financial services product, the rules should apply. If a company that they managed fails within ten years of their tenure, they should forfeit a percentage of the profits that they acquired. The percentage should decrease over time.
It's important for the public to know the progress you are making on this vital issue. You should report back to the public annually with a detailed report on progress in creating accountability for Wall Street pay. The report should contain examples, not by name, of actions that you have taken to protect the American ctizens.
Referencing Docket No.'s:
OTS: RIN 155-AC49
OCC: RIN 1557-AD39
Fed: RIN 7100-AD69
SEC: RIN 3235-AL06
FHFA: RIN 2590-AA42
FDIC: RIN 3064-AD56
Sincerely,
Mr. Mark Gorman