ABA Banking Journal - October 2010 - (Page 52)
Coping with the Dodd-Frank Act Mayday for With Dodd-Frank pay rules pending, there are more questions than answers. But there are steps banks can, and should, take now By Steve Cocheo, executive editor payday? W hen Charles Elson considers the jubilation expressed by backers of the governance and executive compensation provisions of the Dodd-Frank Act, he finds it ironic. At best, says Elson, a governance expert, they won a pyrrhic victory. True, the law authorized long-sought proxy access for shareholders, which the Securities and Exchange Commission has already implemented. But much of what Dodd-Frank contains regarding compensation, Elson says, “effectively neuters the Compensation Committee.” Elaborating, he says, “it will make the Compensation Committee a tool of federal regulatory mandates, rather than an instrument of promoting shareholder value.” He sees the publicly held banking company’s comp committee increasingly becoming tied up in compliance, not constructive efforts. “The board [working through the comp committee] can’t be the kind of monitor that we should be able to expect,” says Elson, who holds the Edgar S. Woolard, Jr., chair in corporate governance at the University of Delaware 52 | ABA BANKING JOURNAL | OctOber 2010
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