FINANCE : Regulators to Analyze Compensation of Bank Executives

With the uproar over salaries paid to top executives at public corporations, shareholders in the nation’s banks may take some comfort in knowing that the federal government will be looking over executive compensation packages in that industry.

Anaheim-based industry consultant Gerry Findley said compensation, fees and benefits are among a list of items that regulators will be looking at to help determine each institution’s safety and soundness.

It’s all part of the new thrust in regulation to make government agents “micro managers” of financial institutions, Findley said.

But the result, he predicts, will be that banks will be “seriously encumbered in terms of asset growth, risk-taking and cost efficiencies.”

Regulators are trying to set up their rules and procedures for analyzing an institution’s executive pay, asset growth, internal controls and other matters. Final safety and soundness standards are due Aug. 1, 1993, according to the Federal Deposit Insurance Compensation Improvement Act of 1991.