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Financial incentives in a compliance program

Tom Fox | January 28, 2018

One of the areas that many companies have not paid as much attention to in their compliance programs is compensation. The Department of Justice and Securities and Exchange Commission, however, have long made clear that they view monetary structure for compensation, rewarding those employees who do business in compliance with their employer’s compliance program, as one of the ways to reinforce the compliance program and the message of compliance. As far back as 2004, the then-SEC Director of Enforcement, Stephen M. Cutler, said “[M]ake integrity, ethics and compliance part of the promotion, compensation and evaluation processes as well. For at the end of the day, the most effective way to communicate that “doing the right thing” is a priority, is to reward it.” The 2012 FCPA Guidance stated the “DoJ and SEC recognize that positive incentives can also drive compliant behavior. These incentives can take many forms such as personnel evaluations and promotions, rewards for improving and...

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