Some have proposed making incentive compensation packages more closely reflect the composition of the liability side of a banking organization’s balance sheet by including returns on debt, as well as equity, instruments in the calculation of compensation.
11 Others have proposed the much simpler approach of making a significant part of incentive compensation deferred and subject to clawback and forfeiture, with the employee’s ultimate right to the compensation dependent on the firm not having become insolvent, received government assistance, or experienced a similar triggering event.