81_FR_87358 81 FR 87126 - Agency Information Collection Activities: Information Collection Renewal; Submission for OMB Review; Guidance on Sound Incentive Compensation Practices

81 FR 87126 - Agency Information Collection Activities: Information Collection Renewal; Submission for OMB Review; Guidance on Sound Incentive Compensation Practices

DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency

Federal Register Volume 81, Issue 232 (December 2, 2016)

Page Range87126-87127
FR Document2016-28903

The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on the renewal of an information collection as required by the Paperwork Reduction Act of 1995 (PRA). An agency may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning renewal of an information collection titled, ``Guidance on Sound Incentive Compensation Practices.'' The OCC also is giving notice that it has sent the collection to OMB for review.

Federal Register, Volume 81 Issue 232 (Friday, December 2, 2016) 
[Federal Register Volume 81, Number 232 (Friday, December 2, 2016)]
[Notices]
[Pages 87126-87127]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-28903]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency


Agency Information Collection Activities: Information Collection 
Renewal; Submission for OMB Review; Guidance on Sound Incentive 
Compensation Practices

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.

ACTION: Notice and request for comment.

-----------------------------------------------------------------------

SUMMARY: The OCC, as part of its continuing effort to reduce paperwork 
and respondent burden, invites the general public and other Federal 
agencies to comment on the renewal of an information collection as 
required by the Paperwork Reduction Act of 1995 (PRA).
    An agency may not conduct or sponsor, and a respondent is not 
required to respond to, an information collection unless it displays a 
currently valid Office of Management and Budget (OMB) control number.
    The OCC is soliciting comment concerning renewal of an information 
collection titled, ``Guidance on Sound Incentive Compensation 
Practices.'' The OCC also is giving notice that it has sent the 
collection to OMB for review.

DATES: Written comments should be submitted by January 3, 2017.

ADDRESSES: Because paper mail in the Washington, DC area and at the OCC 
is subject to delay, commenters are encouraged to submit comments by 
email, if possible. Comments may be sent to: Legislative and Regulatory 
Activities Division, Office of the Comptroller of the Currency, 
Attention: 1557-0245, 400 7th Street SW., Suite 3E-218, Mail Stop 9W-
11, Washington, DC 20219. In addition, comments may be sent by fax to 
(571) 465-4326 or by electronic mail to [email protected]. You may 
personally inspect and photocopy comments at the OCC, 400 7th Street 
SW., Washington, DC 20219. For security reasons, the OCC requires that 
visitors make an appointment to inspect comments. You may do so by 
calling (202) 649-6700 or, for persons who are deaf or hard of hearing, 
TTY, (202) 649-5597. Upon arrival, visitors will be required to present 
valid government-issued photo identification and submit to security 
screening in order to inspect and photocopy comments.
    All comments received, including attachments and other supporting 
materials, are part of the public record and subject to public 
disclosure. Do not include any information in your comment or 
supporting materials that you consider confidential or inappropriate 
for public disclosure.
    Additionally, please send a copy of your comments by mail to: OCC 
Desk Officer, 1557-0245, U.S. Office of Management and Budget, 725 17th 
Street NW., #10235, Washington, DC 20503 or by email to: oira 
[email protected].

FOR FURTHER INFORMATION CONTACT: Shaquita Merritt, OCC Clearance 
Officer, (202) 649-5490 or, for persons who are deaf or hard of 
hearing, TTY, (202) 649-5597, Legislative and Regulatory Activities 
Division, Office of the Comptroller of the Currency, 400 7th Street 
SW., Washington, DC 20219.

SUPPLEMENTARY INFORMATION: The OCC requests that OMB extend its 
approval of the following information collection:
    Title: Guidance on Sound Incentive Compensation Policies.
    OMB Number: 1557-0245.
    Abstract: Under the guidance, each national bank and Federal 
savings association is required to: (i) For a large national bank or 
Federal savings association, have policies and procedures that identify 
and describe the role(s) of the personnel and units authorized to be 
involved in developing and administering incentive compensation 
arrangements, identify the source of significant risk-related factors, 
establish appropriate controls governing these factors to help ensure 
their reliability, and identify the individual(s) and unit(s) whose 
approval is necessary for the establishment or modification of 
incentive compensation arrangements; (ii) create and maintain 
sufficient documentation to permit an audit of the organization's 
processes for developing and administering incentive compensation 
arrangements; (iii) have any material exceptions or adjustments to the 
incentive compensation arrangements established for senior executives 
approved and documented by its board of directors; and (iv) for a large 
national bank or Federal savings association, have its board of 
directors receive and review, on an annual or more frequent basis, an 
assessment by management of the effectiveness of the design and 
operation of the organization's incentive compensation system in 
providing risk-taking incentives that are consistent with the 
organization's safety and soundness.
    Type of Review: Regular.
    Affected Public: Businesses or other for-profit.
    Estimated Number of Respondents: 41 large banks; 1,381 small banks.
    Estimated Burden per Respondent: 520 hours (480 for setup; 40 for 
yearly

[[Page 87127]]

maintenance) for large banks; 120 hours (80 for setup; 40 for yearly 
maintenance) for small banks.
    Frequency of Response: Annually.
    Total Annual Burden: 187,040 hours.
    On July 27, 2016, the OCC issued a 60-day notice soliciting comment 
on the information collection, 81 FR 49356. One comment was received 
from an individual.
    The commenter stated that the burden estimates are low, 
unrealistic, and unsupported by empirical evidence. The commenter 
requested that the next notice explain how the burden estimates were 
calculated and the empirical evidence used in the calculation.
    The commenter believes that the requirements in the guidance 
requiring institutions to have policies, procedures, appropriate 
controls, and sufficient documentation to permit an audit of the 
incentive compensation arrangements and for the board of directors to 
review, at least annually, an assessment of the effectiveness of the 
design and operation of the bank's incentive compensation system to 
ensure safety and soundness would likely be met by having the internal 
audit department examine incentive compensation systems and provide 
reports to the board audit committee. The commenter estimates that, in 
institutions with $20 billion or more in total assets, a minimum of 
four internal auditors customarily spend three or four weeks auditing 
the effectiveness of the design and operation of incentive compensation 
systems, resulting in an annual assessment of the effectiveness of the 
design and operation of the bank's incentive compensation system at 
large banks taking a minimum of 640 hours to complete. The commenter 
also stated that this estimate would not include additional hours 
needed every year to: (i) Update policies; (ii) revise procedures; 
(iii) adjust controls; and (iv) document annual incentive payments and 
document approvals. The commenter believes that, in large, systemically 
important institutions, internal auditors can spend one to two thousand 
hours auditing the many incentive compensation plans for compliance 
with OCC requirements.
    The commenter also believes that the estimate for ``small banks'' 
is also grossly underestimated and that, in a small bank ($50 million 
in total assets), it would take one person at least one week to assess 
the effectiveness of the design and operation of the compensation 
systems and format the results to be submitted to the board of 
directors. This would be in addition to the 40 hours needed to update 
written policies and procedures, document annual incentive payments, 
and document approvals.
    The OCC uses the legal standard for estimating burden hours under 
the PRA (44 U.S.C. 3502(2)). The term ``burden'' means time, effort, or 
financial resources expended by persons to generate, maintain, or 
provide information to or for a Federal agency, including the resources 
expended for: (a) Reviewing instructions; (b) acquiring, installing, 
and utilizing technology and systems; (c) adjusting the existing ways 
to comply with any previously applicable instructions and requirements; 
(d) searching data sources; (e) completing and reviewing the collection 
of information; and (f) transmitting, or otherwise disclosing the 
information. The OCC believes that its burden estimates are accurate, 
given that institutions already have the required arrangements in 
place, including any required systems and procedures.
    The banking agencies \1\ estimated in their original notice \2\ 
that large institutions would spend 480 hours to modify their policies 
and procedures to monitor incentive compensation. Small institutions 
would spend 80 hours to establish or modify policies and procedures to 
monitor incentive compensation. Forty hours would be required to 
maintain an incentive compensation program.
---------------------------------------------------------------------------

    \1\ OCC, Board of Governors of the Federal Reserve System, and 
Federal Deposit Insurance Corporation.
    \2\ 75 FR 36395 (June 25, 2010).
---------------------------------------------------------------------------

    In the experience of the banking agencies, two months is typically 
required for a large institution to set up a program of this complexity 
and one business week is required for yearly maintenance. The banking 
agencies generated these estimates based on their experience with other 
information collections.
    Comments continue to be invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the functions of the OCC, including whether the 
information has practical utility;
    (b) The accuracy of the OCC's estimate of the information 
collection burden;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of the collection on respondents, 
including through the use of automated collection techniques or other 
forms of information technology; and
    (e) Estimates of capital or startup costs and costs of operation, 
maintenance, and purchase of services to provide information.

    Dated: November 28, 2016.
Karen Solomon,
Deputy Chief Counsel, Office of the Comptroller of the Currency.
[FR Doc. 2016-28903 Filed 12-1-16; 8:45 am]
BILLING CODE 4810-33-P

87126 Federal Register / Vol. 81, No. 232 / Friday, December 2, 2016 / Notices Title: Merchant Marine Medals and DEPARTMENT OF THE TREASURY comment or supporting materials that Awards. you consider confidential or Office of the Comptroller of the inappropriate for public disclosure. OMB Control Number: 2133–0506. Currency Additionally, please send a copy of Type of Request: Renewal of a your comments by mail to: OCC Desk Previously Approved Information Agency Information Collection Officer, 1557–0245, U.S. Office of Collection. Activities: Information Collection Management and Budget, 725 17th Abstract: This information collection Renewal; Submission for OMB Review; Street NW., #10235, Washington, DC of information provides a method of Guidance on Sound Incentive 20503 or by email to: oira submission@ Compensation Practices omb.eop.gov. awarding merchant marine medals and decorations to masters, officers, and AGENCY: Office of the Comptroller of the FOR FURTHER INFORMATION CONTACT: crew members of U.S. ships in Currency (OCC), Treasury. Shaquita Merritt, OCC Clearance recognition of their service in areas of ACTION: Notice and request for comment. Officer, (202) 649–5490 or, for persons danger during the operations by the who are deaf or hard of hearing, TTY, Armed Forces of the United States in SUMMARY: The OCC, as part of its (202) 649–5597, Legislative and continuing effort to reduce paperwork Regulatory Activities Division, Office of World War II, Korea, Vietnam, and and respondent burden, invites the the Comptroller of the Currency, 400 7th Operation Desert Storm and Operations Street SW., Washington, DC 20219. Restore Hope and United Shield. general public and other Federal agencies to comment on the renewal of SUPPLEMENTARY INFORMATION: The OCC Affected Public: Master, officers and an information collection as required by requests that OMB extend its approval crew members of U.S. ships. the Paperwork Reduction Act of 1995 of the following information collection: Estimated Number of Respondents: (PRA). Title: Guidance on Sound Incentive 550. An agency may not conduct or Compensation Policies. sponsor, and a respondent is not OMB Number: 1557–0245. Estimated Number of Responses: 550. Abstract: Under the guidance, each required to respond to, an information Annual Estimated Total Annual collection unless it displays a currently national bank and Federal savings Burden Hours: 550. valid Office of Management and Budget association is required to: (i) For a large (OMB) control number. national bank or Federal savings Frequency of Response: Annually. The OCC is soliciting comment association, have policies and ADDRESSES: Send comments regarding concerning renewal of an information procedures that identify and describe the burden estimate, including collection titled, ‘‘Guidance on Sound the role(s) of the personnel and units suggestions for reducing the burden, to Incentive Compensation Practices.’’ The authorized to be involved in developing the Office of Management and Budget, OCC also is giving notice that it has sent and administering incentive Attention: Desk Officer for the Office of the collection to OMB for review. compensation arrangements, identify the Secretary of Transportation, 725 the source of significant risk-related DATES: Written comments should be 17th Street NW., Washington, DC 20503. factors, establish appropriate controls submitted by January 3, 2017. Comments are invited on: whether the governing these factors to help ensure ADDRESSES: Because paper mail in the their reliability, and identify the proposed collection of information is Washington, DC area and at the OCC is individual(s) and unit(s) whose necessary for the proper performance of subject to delay, commenters are approval is necessary for the the functions of the Department, encouraged to submit comments by establishment or modification of including whether the information will email, if possible. Comments may be incentive compensation arrangements; have practical utility; the accuracy of sent to: Legislative and Regulatory (ii) create and maintain sufficient the Department’s estimate of the burden Activities Division, Office of the documentation to permit an audit of the of the proposed information collection; Comptroller of the Currency, Attention: organization’s processes for developing ways to enhance the quality, utility and 1557–0245, 400 7th Street SW., Suite and administering incentive clarity of the information to be 3E–218, Mail Stop 9W–11, Washington, compensation arrangements; (iii) have collected; and ways to minimize the DC 20219. In addition, comments may any material exceptions or adjustments burden of the collection of information be sent by fax to (571) 465–4326 or by to the incentive compensation on respondents, including the use of electronic mail to prainfo@occ.treas.gov. arrangements established for senior automated collection techniques or You may personally inspect and executives approved and documented other forms of information technology. photocopy comments at the OCC, 400 by its board of directors; and (iv) for a 7th Street SW., Washington, DC 20219. large national bank or Federal savings Authority: The Paperwork Reduction Act For security reasons, the OCC requires of 1995; 44 U.S.C. Chapter 35, as amended; association, have its board of directors that visitors make an appointment to receive and review, on an annual or and 49 CFR 1.93. inspect comments. You may do so by more frequent basis, an assessment by By order of the Maritime Administrator. calling (202) 649–6700 or, for persons management of the effectiveness of the Dated: November 21, 2016. who are deaf or hard of hearing, TTY, design and operation of the Gabriel Chavez, (202) 649–5597. Upon arrival, visitors organization’s incentive compensation will be required to present valid system in providing risk-taking Acting Secretary, Maritime Administration. government-issued photo identification asabaliauskas on DSK3SPTVN1PROD with NOTICES [FR Doc. 2016–29001 Filed 12–1–16; 8:45 am] incentives that are consistent with the and submit to security screening in organization’s safety and soundness. BILLING CODE 4910–81–P order to inspect and photocopy Type of Review: Regular. comments. Affected Public: Businesses or other All comments received, including for-profit. attachments and other supporting Estimated Number of Respondents: 41 materials, are part of the public record large banks; 1,381 small banks. and subject to public disclosure. Do not Estimated Burden per Respondent: include any information in your 520 hours (480 for setup; 40 for yearly VerDate Sep<11>2014 17:55 Dec 01, 2016 Jkt 241001 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 E:\FR\FM\02DEN1.SGM 02DEN1

Federal Register / Vol. 81, No. 232 / Friday, December 2, 2016 / Notices 87127 maintenance) for large banks; 120 hours annual incentive payments, and and purchase of services to provide (80 for setup; 40 for yearly maintenance) document approvals. information. for small banks. The OCC uses the legal standard for Dated: November 28, 2016. Frequency of Response: Annually. estimating burden hours under the PRA Karen Solomon, Total Annual Burden: 187,040 hours. (44 U.S.C. 3502(2)). The term ‘‘burden’’ On July 27, 2016, the OCC issued a Deputy Chief Counsel, Office of the means time, effort, or financial Comptroller of the Currency. 60-day notice soliciting comment on the resources expended by persons to information collection, 81 FR 49356. [FR Doc. 2016–28903 Filed 12–1–16; 8:45 am] generate, maintain, or provide One comment was received from an information to or for a Federal agency, BILLING CODE 4810–33–P individual. including the resources expended for: The commenter stated that the burden (a) Reviewing instructions; (b) estimates are low, unrealistic, and DEPARTMENT OF THE TREASURY acquiring, installing, and utilizing unsupported by empirical evidence. The technology and systems; (c) adjusting commenter requested that the next Internal Revenue Service the existing ways to comply with any notice explain how the burden estimates previously applicable instructions and Proposed Collection; Comment were calculated and the empirical requirements; (d) searching data Request for Form 8974 evidence used in the calculation. The commenter believes that the sources; (e) completing and reviewing AGENCY: Internal Revenue Service (IRS), requirements in the guidance requiring the collection of information; and (f) Treasury. institutions to have policies, transmitting, or otherwise disclosing the information. The OCC believes that its ACTION: Notice and request for procedures, appropriate controls, and comments. sufficient documentation to permit an burden estimates are accurate, given audit of the incentive compensation that institutions already have the SUMMARY: The Department of the arrangements and for the board of required arrangements in place, Treasury, as part of its continuing effort directors to review, at least annually, an including any required systems and to reduce paperwork and respondent assessment of the effectiveness of the procedures. burden, invites the general public and design and operation of the bank’s The banking agencies 1 estimated in other Federal agencies to take this incentive compensation system to their original notice 2 that large opportunity to comment on proposed ensure safety and soundness would institutions would spend 480 hours to and/or continuing information likely be met by having the internal modify their policies and procedures to collections, as required by the audit department examine incentive monitor incentive compensation. Small Paperwork Reduction Act of 1995, compensation systems and provide institutions would spend 80 hours to Public Law 104–13 (44 U.S.C. reports to the board audit committee. establish or modify policies and 3506(c)(2)(A)). Currently, the IRS is The commenter estimates that, in procedures to monitor incentive soliciting comments concerning Form institutions with $20 billion or more in compensation. Forty hours would be 8974, Qualified Small Business Payroll total assets, a minimum of four internal required to maintain an incentive Tax Credit for Increasing Research auditors customarily spend three or four compensation program. Activities. weeks auditing the effectiveness of the In the experience of the banking agencies, two months is typically DATES: Written comments should be design and operation of incentive required for a large institution to set up received on or before January 31, 2017 compensation systems, resulting in an a program of this complexity and one to be assured of consideration. annual assessment of the effectiveness of the design and operation of the bank’s business week is required for yearly ADDRESSES: Direct all written comments incentive compensation system at large maintenance. The banking agencies to Tuawana Pinkston, Internal Revenue banks taking a minimum of 640 hours generated these estimates based on their Service, Room 6526, 1111 Constitution to complete. The commenter also stated experience with other information Avenue NW., Washington, DC 20224. that this estimate would not include collections. FOR FURTHER INFORMATION CONTACT: additional hours needed every year to: Comments continue to be invited on: Requests for additional information or (i) Update policies; (ii) revise (a) Whether the collection of copies of the form and instructions procedures; (iii) adjust controls; and (iv) information is necessary for the proper should be directed to Sara Covington, document annual incentive payments performance of the functions of the Internal Revenue Service, Room 6526, and document approvals. The OCC, including whether the information 1111 Constitution Avenue NW., commenter believes that, in large, has practical utility; Washington, DC 20224, or through the systemically important institutions, (b) The accuracy of the OCC’s internet at Sara.L.Covington@irs.gov. internal auditors can spend one to two estimate of the information collection SUPPLEMENTARY INFORMATION: thousand hours auditing the many burden; Title: Qualified Small Business incentive compensation plans for (c) Ways to enhance the quality, Payroll Tax Credit for Increasing compliance with OCC requirements. utility, and clarity of the information to Research Activities. The commenter also believes that the be collected; OMB Number: 1545–XXXX. estimate for ‘‘small banks’’ is also (d) Ways to minimize the burden of Form Number: 8974. grossly underestimated and that, in a the collection on respondents, including Abstract: The law allows a qualified small bank ($50 million in total assets), small business to elect a portion (up to asabaliauskas on DSK3SPTVN1PROD with NOTICES through the use of automated collection it would take one person at least one techniques or other forms of information $250,000) of the research credit against week to assess the effectiveness of the technology; and payroll taxes. Section 3111(f) allows the design and operation of the (e) Estimates of capital or startup costs elected amount as a credit for the compensation systems and format the and costs of operation, maintenance, quarter up to the total amount of the results to be submitted to the board of employer’s share of social security tax. directors. This would be in addition to 1 OCC, Board of Governors of the Federal Reserve Any unused credit can be carried the 40 hours needed to update written System, and Federal Deposit Insurance Corporation. forward to the next quarter. Form 8974 policies and procedures, document 2 75 FR 36395 (June 25, 2010). is used by businesses and individuals VerDate Sep<11>2014 17:55 Dec 01, 2016 Jkt 241001 PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 E:\FR\FM\02DEN1.SGM 02DEN1


Document Created: 2018-02-14 09:01:54
Document Modified: 2018-02-14 09:01:54
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice and request for comment.
DatesWritten comments should be submitted by January 3, 2017.
ContactShaquita Merritt, OCC Clearance Officer, (202) 649-5490 or, for persons who are deaf or hard of hearing, TTY, (202) 649-5597, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street SW., Washington, DC 20219.
FR Citation81 FR 87126 
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR