Financial Regulatory Forum

Taiwan takes tough stance on corporate governance

By Patricia Lee

(Complinet) Taiwan’s Financial Supervisory Commission has stepped up enforcement of its corporate governance regulations by making it mandatory for listed firms and financial institutions to appoint independent directors and set up a remuneration committee. The latest regulations will carry a penalty in the event of any breaches, an FSC official told Complinet, speaking on condition of anonymity.

According to the FSC official, although the requirement to appoint independent directors was not entirely new, the commission’s latest move built on its existing corporate governance regulations. It further expands their reach to cover the entire spectrum of the financial services sector.

Securities investment trust enterprises and integrated securities firms which are not subsidiaries of a financial holding company, exchange- or over-the-counter-listed futures commission merchants, as well as exchange- or OTC-listed non-financial institutions each with a paid-in capital of at least NT$10 billion ($344.7 million), but not exceeding NT$50 billion ($1.7 billion), are the four additional types of firms in the financial sector now covered under the corporate governance regulations.

The FSC official said: “The fact that the corporate governance regulations now cover as many different types of companies within the financial sector including those with a paid-in capital of NT$10billion shows that the FSC is serious about raising the standards of corporate governance of financial institutions in addition to that for listed companies.”

The FSC’s move to make setting up a remuneration committee mandatory for firms listed on the Taiwan Stock Exchange or traded over-the-counter, underscores its commitment to strengthening corporate governance and risk management. According to a recent FSC statement, the new regulation set out requirements governing the composition of the committee, the scope of its powers, rules of procedure, professional qualifications, independence, and the exercise of its powers. “The purpose of the regulations is to ensure a sound remuneration system for companies’ board members, supervisors, and executive officers,” it said.

Dodd-Frank’s hatchet men: SEC & others go after incentive-based compensation

March 8 (Westlaw Business) –  Can Dodd-Frank’s latest anti-risk salvo, a new proposed rule on incentive-based compensation, solve as many questions as it raises? In theory, the idea is a noble one: break the chain of managing for the short-money by curtailing lopsided risks that ultimately soak the taxpayer. But even the SEC and the other agencies involved under the new Dodd-Frank regime admit there will be no shortage of questions.

Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act lays the groundwork for the regulation of incentive-based compensation. The statute formally rejects the idea that it “require[s] the reporting of the actual compensation of particular individuals;” likewise, the statute’s scheme thus offered does not apply to otherwise covered institutions lacking incentive-based compensation packages. (more…)

ANALYSIS-US companies tweak CEO pay packages ahead of vote

By Dena Aubin

NEW YORK, Jan. 5 (Reuters) - Corporate America is bracing for the judgment of shareholders on lucrative executive pay packages, tossing out some perks, tweaking pensions and taking pains to show how compensation is linked to performance.

Nearly half the U.S. companies surveyed by consulting firm Towers Watson were adjusting their pay-setting process ahead of the spring votes required at least every three years under the Dodd-Frank financial reform law.

The “say-on-pay” votes are non-binding and come after a strong rally in shares and two years of improved corporate earnings, perhaps blunting shareholder anger at packages that averaged $9.25 million for CEOs at S&P 500 companies in 2009. That is 263 times the average worker’s pay, according to AFL-CIO data. (more…)

PREVIEW-FINRA faces calls to lift veil on finances, pay

By Joseph A. Giannone

NEW YORK, Aug 10 (Reuters) – Wall Street regulator FINRA, which demands disclosure and openness from brokers, is under pressure to lift the veil on its own affairs.

The Financial Industry Regulatory Authority, a private corporation that regulates the nation’s 4,700 brokerages, will learns at its annual meeting on Thursday how many support a dissident’s call for more transparency.

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FACTBOX – How does the EU plan to shake up financial services?

BRUSSELS, April 7 (Reuters) – The European Union (EU) is embarking on an overhaul of financial services that politicians hope will send bankers back to their roots of no-frills lending to households and business.

Michel Barnier is the EU commissioner in charge of the shake up on regulations ranging from curbs on banker pay to a clampdown on speculators betting on government debt.

Here is a guide to the overhaul:

* One of Barnier’s priorities is writing a rule book for trading derivatives, a financial instrument whose value is linked to an asset such as a government bond or currency.

US pay czar: Fannie Mae, Freddie Mac unique when it comes to pay

WASHINGTON, Dec 30 (Reuters) – Mortgage finance firms Fannie Mae and Freddie Mac face a unique set of problems that distinguish them from other companies receiving government aid when it comes to setting executive pay, the Obama administration’s pay czar said on Wednesday.

The two government-controlled companies, which have tapped Treasury credit lines to the tune of a combined $111 billion, said last week they would pay their CEOs up to $6 million in cash for this year.

Kenneth Feinberg, the Treasury Department official charged with overseeing executive pay at firms receiving aid from the government’s $700 billion bailout fund, told CNBC the uncertainty over the future of the mortgage finance companies was one factor that made their situation unique.

Pay czar Feinberg increased base pay at rescued U.S. firms – WSJ

Oct 28 (Reuters) – Kenneth Feinberg, the U.S. Treasury bailout program’s special master for compensation, who cut total compensation for top earners at seven bailed-out firms last week, increased base salaries at the companies, the Wall Street Journal said, citing its own analysis of U.S. Treasury data.

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INTERVIEW – Obama’s pay czar looking ahead to 2010 with deeper, not broader bite

Kenneth Feinberg, Special Master for TARP Executive Compensation, speaks to Reuters during an interview at his Washington law office, October 26, 2009.  REUTERS/Jason Reed   (UNITED STATES)   By Steve Eder
WASHINGTON, Oct 27 (Reuters) – The Obama administration’s pay czar, who sent shock waves through Wall Street by slashing compensation at seven bailed-out companies, says those moves were just the beginning.

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EU central banker Noyer says banks have resumed risk-taking, must preserve capital

Bank of France Governor Christian Noyer attends a conference organized by the Paris Club and Institute for International Finance (IIF) in Paris June 25, 2009. (File Photo) REUTERS/Benoit Tessier   By Jan Dahinten and Neil Chatterjee
SINGAPORE, Oct 26 (Reuters) – European Central Bank Governing Council member Christian Noyer warned that banks are taking the same risks that led to the financial crisis and said they should preserve capital rather than pay it out to bankers and investors.His comments came as regulators around the world mull reforms to lower the risks that large banks can pose to the financial system and rein in the type of recklessness that fueled the credit crisis.

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U.S. slashes pay at seven bailed out firms, cuts cash up to 90 percent

   WASHINGTON, Oct 22 (Reuters) – The U.S. Treasury’s pay czar on Thursday slashed overall pay by more than half for top earners at seven companies that received massive taxpayer bailouts, and ordered that most of their salaries be paid in the form of long-term company stock. Kenneth Feinberg, charged with approving or renegotiating pay contracts for the 25 highest-paid employees at the seven banks and automakers, said their cash compensation for 2009 would drop by more than 90 percent compared to 2008.

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