A year after a Wall Street Journal investigation exposed a toxic and sexualized workplace culture at the bank regulator, the Federal Deposit Insurance Corp. has now reportedly suspended pay bonuses for approximately two dozen executives who are currently under investigation for malfeasance.
According to individuals with knowledge of the situation, the FDIC board unanimously authorized a proposal this week that would also eliminate bonuses for executives and managers in the event that allegations against them are proven accurate.
According to the individuals, the ballot was conducted subsequent to an internal discussion regarding the suspension of the bonuses.
The money should be paid despite the investigations and seized back if necessary, according to certain senior officials.
Jonathan McKernan, a Republican board member, stated that he advocated for the inclusion of the proposal on the agenda of the board meeting scheduled for this week.
Union negotiations would be necessary for the FDIC to establish a policy regarding bonuses for its broader personnel, which is still lacking.
The FDIC’s compensation is notably elevated for a government agency.
Over the past year, the FDIC has encountered significant challenges in resolving its internal issues.
Martin Gruenberg, the Chair of the Federal Deposit Insurance Corporation (FDIC), has maintained his position, and employees have expressed their dissatisfaction with the agency’s lack of commitment to cultural reform.
According to the Journal’s examination of documents, at least one employee who was accused of inappropriate behavior has since been promoted.
The FDIC delayed initiating investigations into misconduct by FDIC executives for five months after a law firm report verified that the agency had a culture rife with sexual harassment and discrimination.
The board reached an agreement in November to establish a new internal Office of Professional Conduct to investigate the allegations, following a lengthy internal debate regarding the appropriate leadership for the investigations.
The FDIC inspector general reported in a report released on Thursday that one-third of the employees it surveyed had either experienced or witnessed harassment. (The survey, which was distributed to employees in March, did not specify the date on which the incidents took place.)
According to the report, numerous senior FDIC officials have been accused of misconduct and harassment.
The report also found that certain FDIC managers had retaliated against those who complained and failed to protect harassment victims, as evidenced by a review of cases and settlement agreements.
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