Finra's board of governors will review allegations that Securities and Exchange Commission Chairman Mary Schapiro — along with other senior Finra executives — received excessive compensation when she was chief executive of the self-regulatory organization for the brokerage industry.
The board also will review whether management mismanaged the Financial Industry Regulatory Authority Inc.'s affairs when it made nearly $30 million in payments in salary and bonuses to senior executives in 2008 despite operating losses of $696 million.
Finra is taking action as a result of a lawsuit filed in August by Amerivet Securities Inc.
At a Feb. 10 meeting in New York, Finra's board will review whether to recoup some portion of the bonuses paid to senior executives in 2008. That year, Ms. Schapiro received $3.3 million in salary and bonuses. Amerivet made a number of other allegations in its lawsuit, and Finra's board has placed the case on its Feb. 10 agenda.
“Consistent with established procedures, the Finra board will review the allegations at its next regular meeting and determine the appropriate course of action at that time,” Finra spokesman Herb Perone said in a press release.
Thirteen current and former executives of Finra — including Ms. Schapiro — made more than $1 million apiece in 2008, according to tax forms that Finra filed in November and the company's annual report.
The highest-compensated executive was former chief administrative officer Michael D. Jones, who left in the summer of 2008 after more than a decade at Finra, with compensation, severance and accumulated benefits valued at $4.43 million. Mr. Jones subsequently joined the Public Broadcasting Service as its chief operating officer.
Besides Ms. Schapiro, several others on the 2008 million-dollar list have left Finra for lower-paying jobs in the public sector. She received an additional payout from Finra of about $7.2 million as part of her accumulated retirement plan benefits.
Elisse Walter's 2008 salary was $3.8 million, including $2.4 million of supplemental retirement benefits. She was in charge of Finra's regulatory policy and programs until July 2008, when she was appointed a member of the SEC.
Douglas Shulman, now commissioner of the Internal Revenue Service, pocketed $2.7 million in salary, bonus and retirement benefits from Finra in 2008. He joined the IRS last March after working more than eight years at Finra, leaving as vice chairman after working for many years in its predecessor organization's data division. He is paid $162,900 by the IRS.