New compensation regulations adopted in the U.S., U.K. and other countries following the financial crisis are causing global financial services companies to focus on talent management and rewards beyond pay to help them attract, retain and engage top talent in today’s environment, according to a poll of financial services executives conducted by Towers Watson. The poll also finds that companies are evenly divided on the impact that the current regulatory environment is having on risk taking in the industry.
In the wake of the financial crisis, several countries have enacted legislation aimed at curbing risk taking by large financial companies. In the United States, for example, both the Troubled Asset Relief Program and the Dodd-Frank Wall Street Reform and Consumer Protection Act require financial institutions to review and disclose whether their compensation programs encourage executives, traders and other employees to take “excessive” risks. Similar rules were adopted in many European companies following guidelines issued by the Financial Stability Board in 2009.
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