The situation has swept up executives who haven’t been accused of any misconduct, according to the people, who asked not to be named discussing the confidential process. For denizens of the financial industry, it offers a cautionary tale about what can happen now that banks are diverting billions of dollars annually into stock awards to be doled out in the future…

“That’s the fear: You’re going to be at the wrong place at the wrong time — you didn’t do anything bad but you’re going to be judged in a politically, potentially arbitrary way,” said Alan Johnson, managing director of compensation consultant Johnson Associates. “It’s like nuclear fallout. The bomb didn’t drop on you but you were within five miles of it.”

Highly paid executives at banks typically received as as little as 30% of their earnings in the form of long-term compensation before the financial crisis — a portion that’s grown to 50% to 60% today, according to Johnson Associates. Wells Fargo’s top five earners received 72% of their pay in long-term awards by 2018, according to its most recent annual proxy statement.

Bloomberg News / February 6, 2020