Dodd-Frank includes Wall Street pay restrictions that could've held executives like SVB's Greg Becker accountable for their dangerous short-sightedness. But regulators consistently fail to implement this part of the law.
, that’s exactly how it turned out at SVB. The board loaded up Becker’s compensation packages with stock-based pay and he pursued risky strategies, overly relying on a single, volatile industry — technology — and then locking up cash from largely uninsured deposits in long-term bonds, without preparing for interest rate hikes.
His largest payday came in 2021 when SVB stock was trading as high as $700 per share. That year Becker cashed in $19 million in options and $6.7 million in stock grants he’d received in the mid-2010s when the stock was only worth about $100 per share. But financial regulators don’t have to wait for Capitol Hill to enforce pay restrictions that have been in the law since 2010. The Biden administration should seize this moment to change the incentives for banking executives. For too long, Wall Street recklessness has generated huge windfalls for the rich and huge costs for the rest of us.Sarah Anderson directs the Global Economy Project of the Institute for Policy Studies, and is a co-editor of Inequality.org.
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