BUSINESS
10/19/2010 05:12 am ET Updated May 25, 2011

Executive Pay: Wall Street Reform Bill Gives Regulators Power Over Compensation

That largely overlooked provision of the law gives federal agencies expanded powers to write regulations dictating pay at financial firms. How they choose to use these powers could have a major impact on whether banks pursue excessive risks.

"The financial crisis made patently clear that the direct regulation of the choices that banks make is bound to be imperfect because regulators are often following behind," said Lucian A. Bebchuk, a Harvard Law School professor who has advised the Obama administration on executive compensation issues.

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