Subject: End Wall Street's Game of 'Heads I Win, Tails You Lose' s7-12-11

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. 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 need tough rules so that Wall Street pay packages don't encourage short-term risk taking.

Your rules should
1) Require at least a five year deferral period for executive bonuses at big banks, ban executive hedging of their pay packages, and 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.
2) Require big banks to prohibit executives from "hedging" their compensation making side deals to get most of their money today and get around the deferral rules. Research shows that executives who do this are generally betting on future losses for their own company. A well run bank should not allow this.
3) Not allow Wall Street to get away with narrative generalities about how they've reduced incentives for risk taking. Require specific and detailed reporting by banks on exactly how they ensure their executives' salaries are on the line if the company performs badly in the future.

Once this rule is passed, only you will know the details of its enforcement. But 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.

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,

Ms. Patricia Snowden