Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010, federal financial regulatory agencies have requested public comment on a joint proposed rule to ensure that regulated financial institutions design their incentive compensation arrangements to take account of risk. The proposed rule would apply to certain financial institutions with more than $1 billion in assets. In prohibiting incentive compensation arrangements that could encourage inappropriate risks, the proposal would require compensation practices at regulated financial institutions to be consistent with three key principles: (i) that incentive compensation arrangements should appropriately balance risk and financial rewards; (ii) be compatible with effective controls and risk management; and (iii) be supported by strong corporate governance.