Trends and Regulations in Incentive Pay

Background Sterling Financial Corp. of Spokane, Washington, first started reviewing the risk inherent in its incentive compensation plans back in 2009, when it was a troubled bank operating under a consent order that has since been lifted. “The first few times we spent several hours with the compensation committee so they understood what they were signing off on,’’ said Karla Gehlen, executive vice president of human resources for the $9.6-billion institution, speaking at a Bank Director conference in 2012. She said the bank board and officers wanted to make sure it was thorough so “regulators would have less to poke...