Reprinted with the permission of The Legal Intelligencer. 

The issue of executive compensation, and in particular how much executives are paid, is not a new issue. There have been various attempts throughout the years to regulate the amounts of executive compensation paid to CEOs and other executives. These attempts were largely reactive to down economic periods that resulted with many rank and file individuals losing their jobs whether as a result of mass layoffs or companies becoming insolvent, all the while executives of such companies seemed to continue to receive high salaries and even performance bonuses. Out of the 2008-2009 economic downturn came the Dodd Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), which included many provisions specifically to regulate executive compensation. While most of the mandates of Dodd-Frank relate to regulation through disclosure of pay, the attempt to regulate pay itself has come to fruition this summer. In July, the Securities and Exchange Commission (SEC) and five banking regulators released a comprehensive set of proposed rules (incentive-based compensation arrangements) that not only impose specific pay parameters on incentive-based compensation paid, but also limit pay that financial institutions may provide their executives. It is curious to see how we got to a place where executive pay can be regulated so.