Wall Street firms are tightening their clawback rules.
While clawback provisions were largely restricted to top executives in the past, JPMorgan announced last week it will expand the provision to include any employee who is awarded stock as compensation. The bank will also be more vigilant of cases not just of fraud but those that involve excessive risk-taking or when such activities aren't reported.
Bank of America now reserves the right to clawback pay if profit projections aren't met and Goldman Sachs will make the same demands if employees engage in excessive risk-taking behavior.
Though compensation experts agree the toughened rules are a step in the right direction, they are concerned the changes may not be as effective as the banks make them seem.