More financial institutions, facing pressure from regulators and investors, are starting to employ compensation practices that reward ethical behavior and appropriate risk-taking, and that’s the good news. The bad news, underscored by two recent studies, is that financial institutions still have a long way to go.
According to a recent study conducted by law firm Labaton Sucharow and the University of Notre Dame, 32 percent of more than 1,200 American and British financial services professionals said their compensation structures or bonus plans pressure employees to compromise ethical standards or violate the law. Twenty-seven percent said they don’t agree that the industry puts the interests of clients first.
