Photo: Travis Seitler
The Wall Street Journal has an article up describing how shareholders and the New York City Comptroller’s office, have forced Goldman Sachs and Morgan Stanley into additional disclosures on their compensation clawback policies. Goldman and Morgan Stanley have clarified who clawback provisions apply to and what can trigger them.
Informative. But what should really stand out about the article is this sentence:
Michael Deutsch, an employment lawyer who specialises in Wall Street pay, said that despite clawbacks provisions’ prevalence, “the actual implementation of a clawback has been pretty rare.”
There you have the basic irrelevance of clawbacks, exposed in a single sentence: everyone talks about them, no one uses them.
That could change, but until it does, clawbacks will continue to largely be a sideshow that diverts from regulatory changes that will fundamentally change banks’ business models.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.