Banks to Enforce Stronger Clawback Policies
Capital One, Citigroup and Wells Fargo have now joined a group of other banks that have agreed to extend their clawback policies on a larger variety of employees. Clawback policies are helpful in recouping bonuses that were given to or are intended to be given to employees for their work. Recouping of bonuses may be due to improper work practices. New York City’s Comptroller John Liu, has been pushing for stricter clawback policies, and now banks are cooperating. Having stricter clawback ploicies help to ensure that employees are doing their job in a proper and ethical manner. In order to keep their bonuses, employees now have to be more responsible for the work that they do. The clawback policy is not new, other banks had used the clawback policy against their employees for millions of dollars in bonuses.
These policies are important for limiting improper accounting practices, and improper practices in other fields too. With stricter policies that apply to larger numbers of people, these policies can encourage the fair practice of work. It is important to maintain fair practices because without rules and regulations people would be going to extremes to make profit and can later hurt the economy.
Written By: Jessica Ho
Source: The Wall Street Journal