The top senators on the Senate Banking Committee unveiled bipartisan legislation on Thursday that would allow regulators to claw back compensation from senior executives of failed banks, The Hill reported. The Recovering Executive Compensation from Unaccountable Practices (RECOUP) Act would allow the Federal Deposit Insurance Corporation (FDIC), as well as a bank’s board, to seize executives’ compensation from the 24 months before a bank’s failure. The push for such a clawback mechanism comes in the wake of several high-profile bank failures this spring. Silicon Valley Bank and Signature Bank collapsed within days of each other in March, sparking fears of potential contagion throughout the U.S. banking system. The CEO of Silicon Valley Bank reportedly received about $9.9 million in compensation in 2022, including a $1.5 million bonus, and sold off millions worth of his company’s stock in the weeks before the bank collapsed, according to MarketWatch.
