US regulators discuss new pay limits

Executives at banks and large financial services firms in the US could see a percentage of their compensation deferred under new regulatory measures.

According to reports, the Federal Reserve and the Securities and Exchange Commission are currently involved in talks over a fresh pay proposal that will be published in January 2011.

It stems from the provision in the Dodd-Frank financial reform bill that requires regulators to prohibit remuneration packages that encourage excessive or inappropriate risk-taking.

Speaking off the record, two sources briefed on the matter told Reuters that major financial institutions may be required to pay a chunk of executives' total compensation in the form of stock or other deferred forms, instead of upfront cash.

According to the news agency, one of the insiders said the minimum percentage of pay that will be held back is still under discussion.

A deadline set by the Dodd-Frank law states that new pay regulations must be finished by April next year.