Wall Street May Reduce Compensation Costs to Avoid More Outcry

Plans have been made by banks to pay more to executives in the form of deferred cash payments and stocks that vest after a certain period of time. With this new arrangement, it is only logical that current year earnings would be higher as the bonus payments are deferred. However, this effect should be short-lived. This new arrangement would also make it harder to interpret income statements given the complexity of accounting for such bonus payments.